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Europe Closes Lower; Fed in Focus

European shares closed lower on Wednesday, as investors awaited a key policy statement by the Federal Reserve after its two-day meeting. The pan-European FSTEurofirst 300 Index closed unofficially down 0.2 percent at 1,180.73 points, after a thin and choppy trading day.

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FTSE
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DAX
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CAC 40
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IBEX 35
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Investors around the world will listen carefully for details on when the Fed may start to scale back its $85 billion monthly bond purchases. A policy decision is due at 7 p.m. London time, with Fed Chairman Ben Bernanke expected to hold a press conference shortly afterwards.

(Read More: Even Fed May Not Be Able to Tame Volatile Trading)

In a CNBC survey, the majority of strategists, economists and fund managers who responded forecast the Fed would begin to pare back its asset purchases in December.

(Read More: Markets More Doubtful of Fed Easing Benefits: Survey)

"Investors this week have scaled back expectations of an immediate unwinding of stimulus by the Fed, hopeful that the patchy run of data from the U.S. economy will prevent a reduction in asset purchases in the near-term. Traders are hopeful the Fed will shed some light on a time frame of reducing the pace of quantitative easing," Ishaq Siddiqi, a market strategist at ETX Capital, said in a morning note.

Retail Stocks Outperform

In stocks news, cyclicals like retail posted the biggest gains on Tuesday. Notably, shares in H&M closed around 2 percent higher, despite the Swedish retailer posting a worse-than-expected drop in second quarter earnings.

(Read More: Budget Fashion Struggles: H&M Earnings Drop)

Meanwhile, shares in Nokia closed around 3.4 percent up after Chinese mobile giant Huawei said it had no plans to purchase Nokia, despite market speculation.

However, Vodafone shares closed around 1.6 percent lower on reports that it has upped its offer for Kabel Deutschland to 85 euros per share, matching a rival offer by Liberty Global.

(Read More: Vodafone to Trump Liberty on Kabel Deutschland Bid)

Shares in Berkeley Group closed around 2.2 percent higher, after the U.K. housebuilder reported a 26 percent rise in annual profit. And shares in Alcatel-Lucent ended around 6.6 percent up, after the telecoms giant announced a new cost-cutting plan.