EUROPE MARKETS: Europe Stocks Slip Ahead Of Fed Policy View

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- European equities finished slightly lower Wednesday, with downgrades within the mining and banking sectors clipping some stocks ahead of commentary about monetary policy from the U.S. Federal Reserve.

The Stoxx Europe 600 index fell 0.1% to 327.63 after swaying between gains and losses during the session.

The statement from the U.S. Federal Open Market Committee, which was due after the close of European trade, had the ability to be a source of "high levels of volatility," for markets, said Sam Fox from financial sales at Spreadex in a note.

Analysts widely expect the Fed to "cut a further $10 billion from its quantitative easing program; therefore we can expect global markets to be quite jittery upon the release of this statement," said Fox.

The Fed's new chairwoman, Janet Yellen, will hold an accompanying press conference, and investors will look for any indication on the Fed's view of the pace of U.S. and global growth.

Among country-specific indexes, Germany's DAX 30 index finished 0.4% higher at 9,277.05, as shares of BMW AG zoomed up 7.3% following a bullish yearly earnings and sales forecast from the luxury car maker. But France's CAC 400 index lost 0.1% to 4,308.06.

London's FTSE 100 ended down 0.5% at 6,573.13, with insurance issues swept lower after U.K. finance minister George Osborne, in presenting his annual budget to lawmakers, unveiled plans to end a rule that requires pension funds to be used to buy annuities. Legal & General Group PLC shares fell 8.4%, Aviva PLC gave up 5.2%, Resolution Ltd. lost 4.6% and Standard Life PLC slumped 3.1%.

Annuities are the lifeblood for some insurance companies, so the new rule will have future implications for U.K. insurers, said Richard Hunter, head of equities at Hargreaves Lansdown.

Investors also assessed U.K. jobs data, which included a decline in jobless claims in February and an unemployment rate that held steady at 7.2%. Separately, minutes released from the Bank of England's meeting earlier this month showed officials voted unanimously to keep monetary policy on hold.

The British pound (GBPUSD) rose against the U.S. dollar after the data.

Among individual issues, shares of HSBC Holdings PLC (HSBC) lost 1% after Credit Suisse cut the banking firm to underperform from outperform, citing disappointment that the group hasn't been able to capitalize on its strengths "in terms of funding, liquidity and exposure to global trade."

London-listed shares of Antofagasta PLC dropped 5.3% in the wake of ratings cuts by Credit Suisse and Deutsche Bank, a day after the Chilean copper producer posted a decline in earnings.

"We believe Antofagasta's earnings and cash-flow growth is muted in the medium term and that further 'bumper' dividends are unlikely whilst capex rises and net cash is eroded," said Deutsche Bank research analyst Anna Mulholland in a note to clients.

Smiths Group PLC pulled 3.7% lower after the technology firm's profit fell during the first half of its fiscal year.

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