European shares trimmed losses to close lower on Tuesday, but investors remained cautious about the Federal Reserve's two-day policy meeting, which started on Tuesday.
The pan-European FTSEurofirst 300 provisionally closed down 0.4 percent at 1,253.3 points, as investors looked ahead to the Federal Open Market Committee's policy meeting. The latest Reuters poll showed economists expect the central bank to cut its bond purchases by $10 billion from the current $85 billion per month.
In Europe, one of the worst performers on the FTSE index, was Lloyds Banking Group, whose shares closed down around 3.5 percent on the news that the U.K. government will sell its 6 percent stake in the part-nationalized bank.
On Amsterdam's AEX index, shares of Philips closed down around 1.9 percent after the electrical goods company announced a 1.5 billion euros ($2 billion) share buyback over the next two-to-three years.
Economic sentiment in the euro zone rose in September, hitting the highest level since 2009, according to the ZEW economic survey in Germany. However, euro zone trade data for July released at the same time showed a decline of 1.6 percent on the month.
Ben May, European economist at Capital Economics, said that although the ZEW data suggested the region's economic recovery continued in the third quarter of 2013, "the external sector is unlikely to provide much fuel to the euro-zone's nascent recovery."
In earnings news, Italian fashion label Prada said its first-half net profit increased by 7.6 percent on the previous year. The company said its results were lifted by above-average revenue growth in its key greater-China market, but the result was lower than analysts had forecast.
Shares of Investec closed down 3around .6 percent after the bank said on Tuesday that it expected first-half profit to decline by up to 10 percent, after a drop in both lending and assets-under-management.
Correction: An earlier version of this story provided the wrong start date for the Fed meeting.
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