European stock indices were under pressure on Tuesday due to a decline in telecommunications sector stocks, while investors focused their attention on the meeting of the U.S. central bank, the Fed, and the decision on interest rates.
The London FTSE index weakened by 0.5 percent by noon, reaching 6,669 points. The Frankfurt DAX index also recorded a loss of about 0.2 percent, dropping to 7,990 points. The Dutch telecom group KPN saw its stock prices fall by five percent, making it one of the biggest losers in European markets. The reason for their decline was the company’s earnings per share that did not meet expectations. Telecoms were therefore the weakest individual sector, with an average loss in stock prices of 0.9 percent. Vodafone shares fell by 1.3 percent, while Nokia’s were down by one percent.
“This is a minor disappointment regarding that sector after it had shown good performance in the past few days,” said Andreas Heinold, an analyst at Germany’s LBBW. The two-day meeting of the U.S. central bank, the Fed, is attracting increasing attention from investors. It is expected that the bank will decide later on Tuesday to reduce the key interest rates by a quarter percentage point to 4.75 percent. “Everyone is waiting for the Fed meeting, and almost everyone expects a rate cut of a quarter percentage point. Anything else would be a surprise,” said Susanne Lahman, a strategist at Bremer Landesbank.
