- Fed announces second round of tapering
- Chinese manufacturing contracts
- Eurozone consumer confidence out
- German inflation released
FTSE 100: -0.22%
CAC 40: -0.25%
FTSE MIB: 0.04%
IBEX 35: -0.50%
Stoxx 600: -0.35%
European stocks were mostly lower after the Federal Reserve announced a second round of stimulus tapering and a report showed a drop in Chinese manufacturing.
The US central bank decided to trim monthly bond purchases by $10bn from $65bn after a two-day meeting which wrapped up yesterday. The Fed said "growth in economic activity picked up" since it last met in December.
The bank also kept its overnight interest rate unchanged at 0%, saying it will remain near zero "well past the time" that unemployment falls below 6.5%.
It was the last meeting under Chairman Ben Bernanke who will pass the baton to Janet Yellen.
"Despite the declines in US markets overnight, the move by the Fed is welcome in a broader context; the central bank has now set a precedent of how much it will cut by, offering the market a level of clarity and shows commitment that even in the face of some mixed data in January (softer conditions in labour market) the Fed has made its mind up and there's no U-turning now," according to Ishaq Siddiqi, Market Strategist at ETX Capital.
Also moving markets was a report from HSBC Holdings Plc and Markit Economics which revealed Chinese manufacturing contracted in January. The purchasing managers' index (PMI) fell to 49.5 this month from 50.5 in December, below the 49.6 consensus forecast and under the 50 level that signals expansion.
The data comes amid concerns over a slowdown in the world's second largest economy. JPMorgan said China poses the greatest risk to emerging markets where currencies have slid, forcing central banks to tighten policies. Central banks in India, Turkey and South Africa raised interest rates this week to address the risk of sharp falls in currencies.
Moving to today's agenda is the release of Eurozone consumer confidence figures, German inflation, US gross domestic product (GDP) and US initial jobless claims.
Roche Holding slumped after the world's biggest maker of cancer drugs after reporting full-year profits that missed analysts' estimates.
Diageo edged lower after the distiller posted an increase in first half profit that fell short of forecasts.
Givaudan SA gained after the maker of flavours and fragrances unveiled full-year net income that surpassed market expectations.
Ericsson was up after the maker of wireless networks reported fourth-quarter net income of 6.41bn kronor following a loss a year earlier.
Banco Santander fell after the Spanish lender said fourth-quarter earnings came in lower than analysts had predicted.
The euro dipped 0.31% to $1.3621.
Brent crude futures rose $0.009 to $107.860 per barrel, ICE data revealed.