Europe open: Shares fall with eyes on Fed, UAE Opec pullout

(Sharecast News) - European shares opened lower on Wednesday as investors eyed the US Federal Reserve two-day policy meeting and the UAE's decision to withdraw from Opec.

The pan-regional Stoxx 600 index was down 0.29% to 604 at 0856 BST with all major bourses lower. Brent crude was edging towards $113 a barrel, a gain of 1.43%.

"The UAE has confirmed its departure from OPEC, a move that has been anticipated for some time, though the timing is notable. As one of the few producers within the cartel capable of rapidly scaling output up or down, the UAE has long been a strategically significant member," said Hargreaves Lansdown investment strategy director Anna Macdonald.

"However, its ambitions have increasingly diverged from those of Saudi Arabia, OPEC's dominant force. Riyadh has consistently favoured supply restraint to support elevated prices and meet its substantial fiscal requirements."

"The UAE, a smaller but wealthier nation accounting for approximately 3.5% of global supply, would like to prioritise higher production volumes and a faster transition away from hydrocarbon dependency in preparation for a post-carbon economy. This strategic divergence has ultimately proved irreconcilable."

On the economics front, the US central bank is expected to hold its policy rate at 3.50% - 3.75% at the conclusion of its meeting later in the day. decisions from Bank of England and European Central Bank are scheduled for Thursday.

In a busy morning for equities, UBS shares gained as the bank reported a better than expected $3bn first quarter net profit.

Deutsche Bank fell after the German lender also revealed a �519m credit loss provision, higher than forecast.

Adidas shares were up as the German sportswear giant's first-quarter profits beat forecasts, while French IT group Sopra Steria jumped almost 15% after a first-quarter trading update.

Reporting by Frank Prenesti for Sharecast.com