European stocks fall ahead of Fed meeting

European stocks declined, following their biggest rally in two months, as investors awaited the outcome of a Federal Reserve meeting starting today.

US stock- index futures were little changed, while Asian shares advanced.

Rexel lost 2 per cent as Ray Investment said it will sell a 7 per cent stake in the company.

Zurich Insurance climbed 1.8 per cent as Swiss Re's chief financial officer George Quinn quit to join Switzerland's biggest insurer.

The Stoxx Europe 600 Index dropped 0.4 per cent to 312.55 at 8:07 am in London. The gauge added 1.3 per cent yesterday after euro-area manufacturing rose more than forecast. The gauge has fallen 3.9 per cent in December as better-than-estimated US economic data led some investors to speculate the Fed will decide to slow bond purchases as early as this week.

Standard and Poor’s 500 Index futures slipped 0.1 per cent, while the MSCI Asia Pacific Index climbed 0.4 per cent.

A report at 11 am Frankfurt time from the ZEW Center for European Economic Research may show that its index of investor and analyst expectations, which aims to predict economic developments six months in advance, climbed for a fifth month to 55 in December, from 54.6 the previous month.

Rexel retreated 2 per cent to €18.05. Ray Investment is selling a stake worth about €368.5 million based on yesterday’s closing price in the electrical-equipment distributor. Ray Investment is offering 20 million shares, the company said in an e-mailed statement late yesterday. The shares are priced at €17.70 to €17.90, according to a person familiar with the transaction.

Zurich Insurance rose 1.8 per cent to 247.80 Swiss francs. The insurer has been seeking a CFO since the suicide of Pierre Wauthier in August. Vibhu Sharma has been filling the position on an interim basis.

Bloomberg