By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets slid from
multiyear highs on Wednesday, as investors stayed cautious ahead of
comments from U.S. Federal Reserve Chairman Ben Bernanke.
The Stoxx Europe 600 index lost 0.5% to 308.49, retreating from
the highest closing level since June 2008, reached on Tuesday.
Among the biggest decliners, shares of Kazakhmys PLC dropped
4.8%, after UBS cut the miner to neutral from buy.
Shares of Britvic PLC surged 12%, after the beverage firm said
adjusted earnings per share rose 48% for the 28 weeks to April 14,
while increasing dividends 1.9% to 5.4 pence (82 cents).
European investors were hesitant to make any major moves, ahead
of events in the U.S. that could provide some clarity on if and how
the Fed chooses to taper its $85-billion-a-month bond-purchase
program. At 3 p.m. London time, 10 a.m. Eastern, Bernanke will
testify before the Joint Economic Committee of Congress, his first
testimony there since late February.
After the European market close, the central bank will release
minutes from its April 30-May 1 meeting, which may provide more
insight into the Fed's stance on quantitative easing.
On Tuesday, two other voting members of the Federal Open Market
Committee spoke, with St. Louis Fed President James Bullard saying
there isn't a case for scaling down the pace of asset purchases as
long as inflation is so low.
Separately, New York Fed President William Dudley said the
uncertain economic outlook makes it difficult to tell if the next
adjustment to the Fed's QE program will be up or down.
"Those looking for firm hints that the Fed is about to scale
back on asset purchases were disappointed by both Bullard and
Dudley (the latter notoriously dovish) last night," analysts at
Danske Bank said in a note.
"Not least Dudley's comments suggest that neither Bernanke nor
today's FOMC minutes will hint at an early QE exit. We continue to
look for the Fed to start tapering its purchases in [the fourth
quarter]," they added.
Back in Europe, minutes from the Bank of England's latest policy
meeting showed the Monetary Policy Committee voted unanimously to
keep interest rates unchanged at a record low 0.5%. Additionally,
three out of the nine members voted in favor of increasing the
bank's asset purchases by 25 billion pounds ($38 billion) to a
total of GBP400 billion.
The pound (GBPUSD) moved lower after the release, trading at
$1.5103, compared with around $1.5135 ahead of the report.
The U.K.'s FTSE 100 index traded slightly lower at 6,801.54,
dropping after climbing to the highest closing level since December
1999 on Tuesday.
Shares of Lloyds Banking Group PLC (LYG) rose 2.2%, after the
bank said it expects to meet its additional capital requirements
without having to issue further equity or use contingent capital
securities.
Germany's DAX 30 index dropped 0.1% to 8,465.66, putting it on
track to break an 11-day winning streak and retreat from an
all-time high.
France's CAC 40 index slipped 0.4% to 4,019.65. Shares of
Lagardere SCA added 3.1%, after J.P. Morgan Cazenove lifted the
stock to neutral from underweight.
Outside the major indexes, shares of Roche Holding AG gained
1.6%, after Citigroup lifted the drug maker to buy from
neutral.
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