European stocks closed lower on Thursday after a day's thin trade, as investors await to see if the U.S. Federal Reserve will unveil further stimulus measures which could add fresh fuel to the market's sharp three-month rally.
The pan-European FTSEurofirst 300 index of top European shares closed 0.1 percent lower at 1,106.71 points.
The Fed is expected to launch a third round of quantitative easing (QE3)later on Thursday and could signal that the frail U.S. economy may warrant ultra-low interest rates for at least another three years.
"There might be a bit of disappointment tonight if the Fed doesn't announce a new round of quantitative easing, but a pull-back after such a strong rally sparked by [ECB head Mario]Draghi's 'magic words' would be quite healthy," said Alain Zeitouni, head of multi-asset management, France, at Russell Investments, which has $166 billion under management.
"But the real question about QE3 is not 'if' the Fed will launch it, it's 'when' it will launch it. If it's not today, it'll be in the next few months."
Euro zone banking stocks were among the top losers, trimming recent lofty gains.
Italian three-year borrowing costs
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