Europe close: Stocks decline as Fed jitters prompt profit-taking

(Sharecast News) - European stock markets fell for the second straight day on Wednesday as nervousness ahead of a Federal Reserve meeting prompted investors to take profits following the recent rally.

The Stoxx 600 fell 0.5% to 533.47 with most major indices across the continent registering losses by the close of trade. Even after the losses of the past two days, the index is still up 12.5% over the month following a strong rebound after the initial post-Liberation Day market sell-off.

"Stocks continue to tread water ahead of tonight's Fed decision, as indices consolidate their gains following April's astonishing rebound," said Chris Beauchamp, chief market analyst at IG. "Markets are anxious to hear [Jerome] Powell's views on the economy this evening, and whether the Fed chairman will give any indications that he might cut rates in June, joining other central banks."

In tariff-related newsflow, US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China's top economic official in Switzerland this weekend for talks amid the ongoing trade war between the world's biggest economies.

"Concerns about how Trump's tariff wars will play out are still causing jitters, even though the door is open to a deal with China, with talks scheduled for this weekend," said Hargreaves Lansdown analyst Susannah Streeter.

"China is aiming to bolster its resilience and ability to withstand trade turmoil by unveiling a range of stimulus measures. It's being seen as tactical positioning to try and give its negotiator a firmer hand in discussions with US Treasury Secretary Scott Bessent in Switzerland."

In economic news, the HCOB Eurozone construction PMI total activity index remained in negative territory last month, at 46.0. However, it was an improvement on March's 44.8, and the softest fall in construction activity since February 2023. New orders, while lower, also fell at the slowest rate in three years.

Meanwhile, eurozone retail sales were 0.1% lower over the course of the month, following a 0.2% increase in February, marking the first monthly decline since October.

Market movers

Novo Nordisk's stock was rising strongly after the Danish drugmaker beat profit forecasts in the first quarter, as investors shrugged off a sales miss and a downgrade to full-year guidance. Net profits jumped 14% to DKK29.0bn, beating the DKK27.8bn market estimate, though sales came in shy of forecasts as sales of its blockbuster weight loss drug Wegovy were held back by copycat versions.

In contrast, shares in GSK and AstraZeneca came under pressure after vaccine-sceptic Vinay Prasad was appointed to a key role at the US Food and Drug Administration.

Denmark's Orsted declined after pulling out of a vast offshore wind project in the North Sea on the back of rising costs and ongoing delays. The world's largest offshore wind developer said it had decided to discontinue the Hornsea 4 project "in its current form".

Also in Copenhagen, Jyske Bank soared after the lender's first quarter earnings beat forecasts. while medical equipment maker Ambu tanks after reporting second-quarter sales and earnings below expectations.