European shares muted on caution ahead of Fed rate decision
For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window
STOXX 600 flat
Euro zone manufacturing downturn eases
Husqvarna climbs on Q4 sales beat
Novartis slips on weakness in key products
U.S. Fed meet due at 1900 GMT
Updates to market close
By Ankika Biswas and Amruta Khandekar
Feb 1 (Reuters) -European shares were muted on Wednesday ahead of a widely anticipated interest rate hike and accompanying commentary from the U.S. Federal Reserve that would provide more clues on the central bank's monetary tightening plans.
The pan-European STOXX 600 .STOXX cut early gains and was flat at the close.
The Fed is widely expected to raise its benchmark interest rates by 25 basis points to 4.50%-4.75% at 2 p.m. ET (1900 GMT).
Investors will also watch Chair Jerome Powell's news conference for clues on how long interest rates could stay elevated.
"Equity markets aren't wanting to make any major moves until we've heard from the Federal Reserve," said Giles Coghlan, chief market analyst at HYCM.
"What the market's oscillating between (is) 'are we going have a very hawkish Powell who's going to tackle inflation or can we have a more dovish Powell, who's more concerned about slowing growth?'"
The Fed's decision will be followed by monetary policy announcements by the European Central Bank and the Bank of England on Thursday, with both likely to raise interest rates by 50 basis points.
The STOXX 600 clocked its biggest January gain since 2015 in the previous session, as a milder winter and China's reopening brightened the outlook for the euro zone economy.
A survey by S&P Global showed the downturn in euro zone manufacturing activity eased again last month.
Meanwhile, a separate report showed euro zone inflation eased for a third straight month in January, but concerns have already been raised about the reliability of the figures.
On Wednesday, Europe's industrial stocks .SXNP were a big boost to the STOXX 600, with Germany's DAX index .GDAXI up 0.4%, helped by gains in Deutsche Post DPWGn.DE and Airbus AIRG.DE. Other bourses in Europe were mixed.
Banks .SX7P rose 0.8%.
BBVA BBVA.MC gained 4.7% after the Spanish bank's fourth-quarter net profit rose 17.6% year-on-year.
However, the gains were offset by steep declines in the healthcare sector .SXDP, with shares of Swiss drugmaker Novartis NOVN.S down 2.7% after analysts pointed to weakness in its key drugs.
On the other hand, Danish drug maker Novo Nordisk NOVOb.CO forecast strong 2023 saleswhile GSK GSK.L beat fourth-quarter profit and sales forecasts.
Still, shares of both firms were down 0.1% and 0.3% respectively.
Among other companies reporting results, Sweden's Husqvarna HUSQb.ST jumped 4% on better-than-expected fourth-quarter sales.
Earnings growth estimates for STOXX 600 companies during the fourth quarter have halved to 7.3% from 14.5% at the start of January, Refinitiv data showed on Tuesday.
Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Savio D'Souza, Vinay Dwivedi and Alex Richardson
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.