Investors hold their fire ahead of Fed stimulus meeting
European shares were down by mid-morning today in what was set to be light and volatile session as investors look to the US Federal Reserve for clues on the duration of its equity-friendly stimulus programme.
The possibility that the Fed could scale back its bond purchases has spooked global equity markets in recent weeks and, although it was generally not expected to make such an announcement at the meeting which ends late today, investors remained nervous.
The FTSEurofirst 300 was down 0.5pc at 1,177.31 points by 0752 GMT, retreating from a session high of 1,186.52 points, and holding more than 6pc below the 5-year highs scaled last month before concerns about the end of ample global stimulus sent markets into a tailspin.
"The market is very nervous," said Oliver Roth, head trader at Close Brothers Seydler.
"For investors, I would say that they should be careful and set their limits - especially stop limits - very carefully, because if there is some change coming up for the Fed policy then there could be a dramatic drop for the market. But I don't expect such a change," he added.
On the technical charts, the 100-day moving average was seen as the likely next resistance for the FTSEurofirst 300, at 1,190.34 points, while the 23.6pc Fibonacci retracement of the recent retreat acted as support, tempering losses.
"We have seen this come-down for 3-1/2 weeks - a normal consolidation after the brilliant bull market in the four weeks before," said Achim Matzke, a strategist at Commerzbank.
"If they give indications for a switch in their policies, then it's not surprising if the consolidation continues, but all in all it looks like the market is on stable ground and perhaps has a chance to go a little bit higher."
Among individual stocks, Nordic companies claimed both the top gainer and the top loser spots in the FTSEurofirst 300.
Nokia rose 4.1pc, after Huawei executive said the company was "open-minded" about the possibility of buying the Finnish mobile phone firm, even though Huawei later clarified it had no plans for an acquisition.
Nordea, meanwhile, fell 4.0pc after Sweden said it has sold shares in the bank at a discount, cutting the state holding to 7.0pc from 13.4.