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European Stocks Subdued Ahead Of U.S. Data, FOMC Decision


European stocks are subdued on Wednesday as investors adopted a cautious stance ahead of U.S. GDP data and the FOMC rate decision today. While few expect any shift in the Fed's accommodative stance for the time being, investors look to the central bank's accompanying statement for any signals of possible monetary tightening before the end of 2013.

Meanwhile, Eurozone economic confidence strengthened more than expected in January, the latest survey results from the European Commission released just a while before showed. The economic confidence index climbed to 89.2 from 87.8 in December and stayed above the consensus forecast of 88.2.

Asian markets ended broadly higher, helped by upbeat U.S. earnings and continued weakness in the yen, while the Dow futures signal Wall Street would probably open little changed with a positive bias.

The Euro Stoxx 50 index of Eurozone bluechip stocks is moving down 0.2 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is declining 0.4 percent. Around Europe, the German DAX and France's CAC 40 are down about 0.1 percent each and Switzerland's SMI is losing 0.3 percent, but the U.K.'s FTSE 100 is gaining 0.1 percent.

Heidelberg Cement is climbing 2.6 percent in Frankfurt on reports HSBC Holdings Plc has reiterated its 'overweight' rating on the stock. Deutsche Boerse is losing 1.5 percent on a brokerage downgrade.

Shares of BP Plc are gaining a percent in London after the company said a U.S. District Court has accepted its plea resolving all federal criminal charges against the company stemming from the horrendous 2010 Deepwater Horizon accident in the Gulf of Mexico that claimed eleven lives and led to a massive oil spill.

Imperial Tobacco Group Plc is tumbling 4.4 percent after it issued a profit warning for the first half.

Roche Holding is losing 1.3 percent after the Swiss drug-maker posted slightly higher full-year IFRS net income of 9.77 billion Swiss francs compared with 9.54 billion Swiss francs a year before.

The euro is trading at a 14-month high against the dollar on growing confidence about a Eurozone recovery and amid expectations the Fed will continue to pump money into the financial system.

In economic releases, Spain's gross domestic product contracted 0.7 percent in the fourth quarter of 2012 from a year earlier, the latest figures from statistical office Ine showed. This was steeper than the 0.3 percent fall in the third quarter and the 0.6 percent contraction expected. Output has been declining steadily since the third quarter of 2011.

Separately, Italy's manufacturing confidence deteriorated from the previous month in January, defying economists' forecast for an improvement, data released by statistical office Istat showed. The manufacturing confidence index dropped to 88.2 in January from 88.9 in December.

by RTTNews Staff Writer

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