*
STOXX 600 flat
*
Euro zone manufacturing downturn eases
*
Husqvarna climbs on Q4 sales beat
*
Novartis slips on weakness in key products
*
U.S. Fed meet due at 1900 GMT
(Updates to market close)
By Ankika Biswas and Amruta Khandekar
Feb 1 (Reuters) - European shares were muted on
Wednesday ahead of a widely anticipated interest rate hike and
accompanying commentary from the U.S. Federal Reserve that would
provide more clues on the central bank's monetary tightening
plans.
The pan-European STOXX 600 cut early gains and was
flat at the close.
The Fed is widely expected to raise its benchmark interest
rates by 25 basis points to 4.50%-4.75% at 2 p.m. ET (1900 GMT).
Investors will also watch Chair Jerome Powell's news
conference for clues on how long interest rates could stay
elevated.
"Equity markets aren't wanting to make any major moves until
we've heard from the Federal Reserve," said Giles Coghlan, chief
market analyst at HYCM.
"What the market's oscillating between (is) 'are we going
have a very hawkish Powell who's going to tackle inflation or
can we have a more dovish Powell, who's more concerned about
slowing growth?'"
The Fed's decision will be followed by monetary policy
announcements by the European Central Bank and the Bank of
England on Thursday, with both likely to raise interest rates by
50 basis points.
The STOXX 600 clocked its biggest January gain since 2015 in
the previous session, as a milder winter and China's reopening
brightened the outlook for the euro zone economy.
A survey by S&P Global showed the downturn in euro zone
manufacturing activity eased again last month.
Meanwhile, a separate report showed euro zone inflation eased for a third straight month in January, but concerns have already been raised about the reliability of the figures. On Wednesday, Europe's industrial stocks were a big boost to the STOXX 600, with Germany's DAX index up 0.4%, helped by gains in Deutsche Post and Airbus . Other bourses in Europe were mixed. Banks rose 0.8%.
BBVA gained 4.7% after the Spanish bank's fourth-quarter net profit rose 17.6% year-on-year. However, the gains were offset by steep declines in the healthcare sector , with shares of Swiss drugmaker Novartis down 2.7% after analysts pointed to weakness in its key drugs.
On the other hand, Danish drug maker Novo Nordisk forecast strong 2023 sales while GSK beat fourth-quarter profit and sales forecasts. Still, shares of both firms were down 0.1% and 0.3% respectively. Among other companies reporting results, Sweden's Husqvarna jumped 4% on better-than-expected fourth-quarter sales. Earnings growth estimates for STOXX 600 companies during the fourth quarter have halved to 7.3% from 14.5% at the start of January, Refinitiv data showed on Tuesday. (Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Savio D'Souza, Vinay Dwivedi and Alex Richardson)
