By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets seesawed into the
close on Wednesday as investors remained cautious ahead of a policy
decision from the U.S. Federal Reserve, while U.K. stocks
outperformed after Bank of England minutes showed a unanimous vote
in favor of keeping rates at a record low.
The Stoxx Europe 600 index ended 0.1% lower at 346.13, after
swinging between small gains and losses earlier in the day.
Helping lift the index, shares of Royal Dutch Shell PLC (RDSB)
picked up 1.8% after the oil giant confirmed it has completed the
sale of 78 million shares of Woodside Petroleum Ltd. . Shares of
Woodside dropped 4.6%. Oil prices (CLN4) were also higher for most
of the European session amid sectarian in violence in Iraq that
could disrupt the country's oil supply. On Wednesday, Iraq's
largest oil refinery was attacked and partially seized by Sunni
militants using machine guns and mortars, according to media
reports. However, at the time of the markets close crude-oil
futures had dipped into negative.
Voestalpine AG gained 2% after Citigroup lifted the steel maker
to buy from neutral. Analysts said the company's long-term
re-rating story "remains under-appreciated by the market."
More broadly, investors waited for the U.S. Fed to conclude its
two-day meeting in Washington. The central bank is widely expected
to slash another $10 billion from its quantitative-easing program,
bringing the monthly amount of asset purchases down to $35 billion.
If the Fed sticks at that pace, its easing could end in October
with a final cut of $15 billion, analysts at HSBC have noted. Read:
What brokerages are saying about the FOMC meeting on Wednesday
Market observers will also be scrutinizing updated economic
projections from the Federal Open Market Committee and the "dots"
that reflect the individual members' view on the rate path. The
FOMC policy statement is out at 2 p.m. Eastern Time followed by a
news conference by Fed Chairwoman Janet Yellen. Read: Markets to
Fed: Give us the 'dot plot' and go home
U.S. stocks were lower ahead of report.
Among European benchmarks, the U.K.'s FTSE 100 index gained 0.2%
to 6,778.56 after the minutes from BOE's monetary-policy decision
earlier in June showed all nine members of the Monetary Policy
Committee voted in favor of leaving the key interest rate at a
record low of 0.5% and making no changes to its 375 billion pound
($636 billion) asset-purchase program.
After BOE Governor Mark Carney last week said rates could rise
sooner than markets currently expect, speculation grew that one or
two members would have voted in favor of tightening policy.
"After some deliberation, markets decided that the minutes were
not quite the signpost towards higher rates that they had
expected," Philip Shaw, chief economist at Investec Securities said
in a note. "Our reading of the yield curve is now that the first
hike is almost fully priced in by this December, having previously
been November."
However, with four MPC members speaking in coming days,
expectations could shift again, Shaw noted.
The pound (GBPUSD) pulled back after the minutes, trading at
$1.6946, down from $1.6966 ahead of the release.
Elsewhere, Germany's DAX 30 index climbed 0.1% to 9,930.33,
while France's CAC 40 index slipped 0.1% to 4,530.37.
More must-reads from MarketWatch:
Mark Carney's salary at the Bank of England is four times what
Janet Yellen is paid at the Fed
Iraq's largest oil refinery attacked
Dollar edges up against rivals ahead of Fed
Subscribe to WSJ: http://online.wsj.com?mod=djnwires