European indices close lower on weak balance sheets and Fed decision on the radar

European shares fell on Wednesday (4), pressured by disappointing earnings and investor nervousness ahead of the monetary policy decision by the US central bank, which is expected to adopt the biggest rate hike since 2000 to tame inflation.

The pan-European STOXX 600 index closed down 1.08% at 441.37 points, and most regional indices also traded in negative territory. Retailers led sectoral losses in Europe, with British online fashion company Boohoo down 12.4% after inflation in freight and logistics costs led to a 28% decline in earnings at its core business.

Pandora fell 2.1% after the Danish jeweler indicated high uncertainty for its balance sheet forecast for the year.

Overall, investors appeared to be nervous ahead of the US central bank’s monetary policy decision, to be released at 15:00 GMT.

The Fed is expected to raise interest rates by 0.50 percentage point and announce the beginning of the reduction of its balance sheet of 9 trillion dollars.

“The Fed’s rate hike may be broadly priced in, but markets are clearly nervous that an even more hawkish Federal Open Market Committee could trigger a spike in volatility that could drive rates back. to below last week’s lows,” said Chris Beauchamp, chief market analyst at online trading platform IG.

• In London, the Financial Times index dropped 0.90%, to 7,493.45 points;
• In Frankfurt, the DAX index fell 0.49% to 13,970.82 points;
• In Paris, the CAC-40 index lost 1.24%, at 6,395.68 points;
• In Milan, the Ftse/Mib index had a devaluation of 1.40%, to 23,902.06 points;
• In Madrid, the Ibex-35 index registered a drop of 1.04%, at 8,500.50 points;
• In Lisbon, the PSI20 index depreciated by 0.88%, to 5,831.68 points.