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European shares close flat ahead of Fed decision

European equities closed flat on Wednesday, paring morning gains, as investors awaited the U.S. Federal Reserve's monetary policy decision.

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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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The FTSEurofist 300 Index closed provisionally lower by 0.1 percent, following morning gains when it hit a fresh five-year high of 1,296.37 points. The index is up by around three percent since the start of October.

Volkswagen shares provisionally closed higher by 4.95 percent after the firm announced that it expected higher profit this year compared to 2012. Shares in Porsche - owned by Volkswagen - also received a bounce, with shares closing higher by 5.85 percent.

Britain's second-biggest clothing retailer, Next, closed higher by 4.7 percent after it increased its 2013 profit guidance, and third-quarter sales came in above expectations.

April Fed 'taper'?

The underlying macroeconomic picture was the main driver behind European bourses, with investors awaiting the outcome of the Federal Reserve's policy-setting meeting, due later Wednesday. The central bank is expected to maintain its $85-billion-a-month bond-purchasing program until April 2014, according to the latest CNBC survey of economists, strategists and money managers.

Asian markets rose on Wednesday as investors expected the same outcome. However, U.S. stocks fluctuated, as investors digested corporate earnings and economic data before the Fed decision.

The Fed will issue its statement at 2 p.m. ET (6 p.m. London time). There will be no press briefing with Chairman Ben Bernanke this month.

Elsewhere, Spain's economy emerged from a two-year recession in the third quarter, according to data released on Wednesday.

Spain's gross domestic product (GDP) grew 0.1 percent in the third quarter, the data released by the country's statistics agency showed, in line with forecasts by analysts polled by Reuters. Spain's IBEX 35 Index climbed 1.16 percent on the news.

(Read More: Spain emerges from two-year recession)

German unemployment rose unexpectedly to high not seen since June on 2011, data from the Labor Office showed on Wednesday. 2,000 more people were out of work in October, however, the unemployment rate was unchanged at historic lows of 6.9 percent.

Meanwhile, the European Commission had some positive news on the euro zone economy. The economic sentiment index rose to 97.8 points in October from 96.9 points in September - its highest level since August 2011. A business climate index released by the Commission also showed a rise, reaching its best level since February 2012.

Barclays profit falls

In other stocks news, French pharmaceutical firm Sanofi lowered its 2013 earnings guidance for the second time this year after it said that net profit in the third quarter fell to 1.21 billion euros ($1.66 billion) from 1.54 billion euros a year ago. The group said in its earnings report that sales had been hit by a slowdown in emerging markets. Shares closed higher by 2.44 percent.

(Read More: Sanofi hit by China slowdown; warns on profit)

Barclays on Wednesday reported a 26 percent drop in third-quarter net profit to £1.39 billion ($2.22 billion) as earnings at its investment banking arm dropped sharply. The group said it had received inquiries from regulatory and enforcement authorities who were investigating potential manipulation of foreign exchange trading. Shares in the U.K. lender rose slightly by 0.9 percent. Analysts at Citi said the good progress the group made on asset reduction should provide some encouragement on Barclays' capital position.

(Read More: Barclays profit falls, cooperating in forex probe)

Shares of carmaker Fiat fell 2.23 percent after it cut its 2013 outlook following a hit to its Latin America revenues. Fiat slashed the bottom end of its trading profit forecast to 3.5 billion euros ($4.8 billion) from 4.0 billion euros.

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