Europe midday: Shares lower ahead of Fed rate decision

(Sharecast News) - European shares were lower on Wednesday as investors eyed the reality of Russian President Vladimir Putin's pledge not to bomb Ukrainian energy infrastructure for a month and awaited a policy decision from the US Federal Reserve.

The pan-regional Stoxx 600 was down 0.11% at 553, Germany's DAX, which hit a record high on Tuesday after parliament agreed to reform debt rules, was down 0.43%.

"The market expects no change in interest rates at this meeting, instead the focus will be on the Federal Reserve's updated economic projections and the Dot Plot, along with Jerome Powell's press conference," said XTB research director Kathleen Brooks.

"What a difference a few weeks make. At the last FOMC meeting at the end of January, hopes were high that the US economy would continue to grow at a strong pace at the same time as inflation moderated."

"However, the outlook for the US economy has changed dramatically in just a few weeks. The backdrop to this meeting includes a global trade war and a stock market rout."

Meanwhile, Russia and Ukraine overnight bombed infrastructure targets only hours after US President Donald Trump and Putin agreed initial steps toward a peace deal to end the war that apparently included a pledge from Moscow not to attack energy and infrastructure for 30 days.

In economic news, eurozone inflation slowed more than initially expected in February with price pressures easing across France, Germany and Ireland.

The harmonised annual rate of consumer price inflation across the single-currency region slowed to 2.3% in February, down from a six-month high of 2.5% in January. This was below the preliminary estimate of 2.4% released two weeks ago and the lowest level since November.

In equity news, defence stocks were up as Germany passed a measure designed to unleash �500bn in spending on weapons and infrastructure. Dassault and BAE were all up on the news.

Compass Group fell after BNP Paribas double downgraded the stock to 'underperform'.

Reporting by Frank Prenesti for Sharecast.com