The majority of the European markets ended Wednesday's session with losses. Investors continued to play it cautious ahead of the conclusion to the U.S. FOMC's 2-day meeting later today. Investors are hoping that the Fed and its Chairman Ben Bernanke will give a clear indication of when stimulus tapering will begin. Banks were weak after a British Parliamentary commission has called for criminal sanction against bad bankers.
Outgoing Bank of England Governor Mervyn King was outvoted in his final policy meeting, as most policymakers overturned his call for additional stimulus citing sustained economic recovery, the minutes of the session held on June 5 and 6 showed Wednesday.
As seen in the past few months, King, Paul Fisher and David Miles sought an increase in quantitative easing by GBP 25 billion, while other six members of the committee voted to retain it at GBP 375 billion.
King, whose call for QE has been defeated since February, is set to step down from the Governor post at the end of this month. He has held the post of the BoE Governor for the past 10 years and cast his vote 194 times since the central bank became independent in 1997. His successor Mark Carney is not expected to take any action at his first MPC meeting in July.
The International Monetary Fund on Wednesday urged Spain and Europe to take urgent steps to generate growth and jobs as the outlook remained tough.
Spain's unemployment level is "unacceptably high" and the outlook remained difficult. "This calls for urgent action to generate growth and jobs, both by Spain and Europe," the lender said in a regular review report.
However, the IMF applauded Spanish authorities for the "strong progress" made on critical and difficult reforms. It noted that key imbalances are correcting rapidly and sovereign spreads have fallen sharply as a result of the reforms.
Greek Finance Minister Yiannis Stournaras said Tuesday that notable progress has been made in negotiations with the country's international creditors on the next bailout installment.
The Greek economy is undergoing significant fiscal adjustment program, as recommended by the troika comprising the European Union, the European Central Bank and the International Monetary Fund, to put the country's debt on a sustainable path.
The twice-bailed out-euro member is now awaiting the next slice of loan installment from the troika. The creditors' representatives are in Athens to carry out a regular inspection on the progress of the program implementation.
The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.55 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.14 percent.
The DAX of Germany dropped by 0.39 percent and the CAC 40 of France fell by 0.55 percent. The FTSE 100 of the U.K. decreased by 0.36 percent, but the SMI of Switzerland gained 0.42 percent.
In Frankfurt, Siemens finished down by 0.25 percent. Citigroup removed Siemens from its ''Most favored stock list.
Kabel Deutschland dipped by 0.15 percent, after Vodafone raised its offer for the cable operator.
In Paris, Alcatel Lucent surged by 6.17 percent. The telecom equipment maker announced a restructuring plan.
In London, Rio Tinto declined by 0.37 percent after reports of lay off in its West Australian iron ore business. Citigroup raised the stock to ''Most Favored Stock List.''
Aggreko fell by 5.25 percent, after UBS downgraded the stock to "Neutral" from "Buy."
HSBC dropped by 1.05 percent, after the Hong Kong Monetary Authority announced that it is investigating HSBC and other banks for possible rigging of interest rates. Royal Bank of Scotland also fell by 0.93 percent and Lloyds Banking Group lost 0.71 percent.
Berkeley, which reported higher annual profit, advanced by 1.76 percent.
National Grid increased by 0.07 percent, after Bank of America Merrill Lynch upgraded it to "Buy" from "Neutral."
Eurozone's construction output increased in April, reversing March's decline, the latest figures from Eurostat revealed Wednesday. Production in construction rose 2 percent month-on-month in April following a 1.8 percent fall in March and a 1.3 percent increase in February.
A leading indicator of French economic activity declined in April, a report from the Conference Board showed Wednesday. The leading economic index or LEI fell 0.5 percent from a month earlier to 114.2 following an increase of 0.4 percent in March. During the six-month through April, the index increased 1.1 percent.
Spain's merchandise trade shortfall decreased significantly from last year in April as exports increased at a notably faster rate than imports, data released by the Commerce Ministry showed Wednesday. The net trade for April resulted in a deficit of EUR1.64 billion, which was 51.1 percent lower than in the same month last year.
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