LONDON: European shares fell on Wednesday after strong gains in the previous day, with investors taking some money off the table ahead of the U.S. Federal Reserve's monetary policy meeting, although tech shares outperformed on Oracle's upbeat outlook.
The Fed is likely to push long-term borrowing costs lower by rebalancing its $2.8 trillion portfolio of bond holdings to weight more heavily to longer-term securities, in a bid to encourage mortgage refinancing without stoking a run-up in consumer prices.
"The market expects that the Fed will come up with some new plans to stimulate the economy. Investors will be extremely disappointed if the Fed does not announce a plan to rebalance its portfolio," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.
"But if it does, we might see limited reaction as it is already priced in."
At 0708 GMT, the FTSEurofirst 300 index of top European shares was down 0.7 percent at 927.78 points after rising 2 percent in the previous session.
However, TECHNOLOGY [] shares were flat, outperforming the wider market on Oracle's robust software sales and forecast of higher-than-expected earnings for the current quarter. ' Reuters
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The Fed is likely to push long-term borrowing costs lower by rebalancing its $2.8 trillion portfolio of bond holdings to weight more heavily to longer-term securities, in a bid to encourage mortgage refinancing without stoking a run-up in consumer prices.
"The market expects that the Fed will come up with some new plans to stimulate the economy. Investors will be extremely disappointed if the Fed does not announce a plan to rebalance its portfolio," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.
"But if it does, we might see limited reaction as it is already priced in."
At 0708 GMT, the FTSEurofirst 300 index of top European shares was down 0.7 percent at 927.78 points after rising 2 percent in the previous session.
However, TECHNOLOGY [] shares were flat, outperforming the wider market on Oracle's robust software sales and forecast of higher-than-expected earnings for the current quarter. ' Reuters
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