European Shares Flat as Investors Await US Fed Interest Rate Decision
European shares were stagnant on Wednesday, with investors adopting a wait-and-see approach ahead of a crucial interest rate decision by the U.S. Federal Reserve. This decision could potentially kickstart a cycle of monetary easing in the world's largest economy, impacting global markets.
The pan-European index was down 0.1% at 516.84 points, driven by weakness in healthcare shares due to reports that Novo Nordisk's Ozempic may face a price cut. This led to a nearly 2% drop in the Danish drugmaker's shares.
Technology shares also contributed to the market's decline with a 0.5% fall. Additionally, the FTSE 100 slipped 0.5% after UK headline inflation remained steady at 2.2% in August, but service sector price growth, closely monitored by the Bank of England, accelerated.
The focus of the day will be on the U.S. central bank's anticipated policy easing, with the interest rate decision scheduled for 1800 GMT. Market expectations suggest a 63% chance of a 50-basis-point reduction, according to CME's FedWatch Tool.
In other news, Reckitt Benckiser shares rose 2.3% following reports of the company exploring the sale of its homecare assets, potentially valued at over 6 billion pounds ($7.89 billion).
In conclusion, the impending U.S. Federal Reserve interest rate decision has the potential to significantly impact global markets and investor sentiment. Stay tuned for updates on this critical event and consider adjusting your investment strategy accordingly to navigate potential market volatility.