- Yellen signals interest rate hike
- EU meets to tackle Crimea turmoil
- France and Spain sell bonds
FTSE 100: -0.64%
CAC 40: -0.56%
FTSE MIB: -0.18%
IBEX 35: -0.52%
Stoxx 600: -0.44%
European stocks declined after Federal Reserve Chair Janet Yellen indicated that the central bank could raise interest rates in about six months after it ends quantitative easing.
Yellen's remarks came after the Federal Open Market Committee (FOMC) voted to scale back its asset purchase programme by another $10bn a month to $55bn, its third staged reduction of stimulus, as expected by analysts.
Bond purchases should come to an end in October or November if the Fed continues to taper at the same rate over coming months.
Speaking after the FOMC announced its latest policy decision, Yellen said interest rates would increase "in the order of around six months". Analysts had widely expected a rate hike to come towards the end of 2015.
"Taking into consideration Yellen's comments, I still don't think the first rate hike will come until later in 2015, although a lot can change between now and then," said Craig Erlam, analyst at Alpari UK.
"Now that traders have had time to digest Yellen's comments and look beyond her words to what she actually meant, I think we could see a small correction this morning."
Turning to today's agenda in the US will be the release of data on weekly jobless claims and existing home sales. The Fed will also release its Dodd-Frank Act Supervisory stress test results for medium-sized firms, to ensure institutions have sufficient capital to absorb losses and support operations during adverse economic conditions.
EU leaders to consider sanctions over Crimea crisis
European Union leaders are due to meet in Brussels today to discuss how to handle Russia's annexation of Crimea from Ukraine.
Russian President Vladimir Putin signed a treaty on Tuesday accepting Crimea as a sovereign state following a referendum on Sunday which showed an overwhelming support for the region to leave Ukraine.
The US and EU have said they would not recognise the referendum.
European leaders are said to be divided on what steps to take next but are said to be considering further sanctions as tensions between Russia and Ukraine remain high.
On Wednesday, pro-Russia forces seized two bases on Wednesday, including Ukraine's navy headquarters in Sevastopol.
United Nations Chief Ban Ki-moon will visit Russian leaders in Moscow today to urge a diplomatic solution to the crisis.
French and Spanish auctions
Spain is due to sell €4-5bn of 2017, 2019 and 2028 bonds, with results due around 09:30 GMT.
France will then publish the results of a sale of €7-8bn of 2016, 2017 and 2019 fixed-rate bonds and €1.0-1.5bn of bonds linked to French and Eurozone inflation.
GSK, Munich Re
GlaxoSmithKline declined after saying its experimental lung-cancer drug failed to meet its objectives in a clinical study.
Munich Re gained after the reinsurer announced it will buy back shares
worth €1bn before its 2015 shareholder meeting.
Credit Agricole rallied after France's third largest bank said it is targeting at least €4bn of annual net income by 2016, above analysts' forecasts.
The euro fell 0.06% to $1.3825.
Brent crude futures dropped $0.132 to $105.70 per barrel, according to the ICE.