European Shares Set to Dip Ahead of Fed Decision

European equities were set to dip on Wednesday, as investors turn cautious ahead of an interest rate decision by the U.S. Federal Reserve.

Financial bookmakers, or spread betters, in London expected Britain's FTSE 100 index to open between 12 and 29 points lower, the German DAX 16 to 23 points lower and the French CAC 40 10 to 20 points lower.

The U.S. Federal Reserve's policy-setting Open Market Committee was set to meet on Tuesday and Wednesday, and investors expected the session to result in a rate cut to boost the economy.

"Today sees the end of the Fed's two-day meeting with the market still expecting a further 50 basis point cut to 3 percent," Oliver Stevens, head of dealing at IG Markets, wrote in a note.

"Anything less is likely to disappoint a market that is relying on Fed chairman Bernanke to save the day. Although recent economic data from the U.S. suggests the world's largest economy might not be in as much trouble as first thought the overriding concern for the market remains a U.S. recession that spreads globally."