(MENAFN- AFP) Europe's major stock markets retreated Tuesday as investors cautiously awaited a US Federal Reserve meeting for clues on the timing of an interest rate increase in the world's top economy.
The US central bank's two-day gathering, which concludes on Wednesday, comes amid more signs of lethargy in the global economy.
"UK and European stocks edged lower on Tuesday, trimming a little more off the huge gains seen last week," said CMC Markets analyst Jasper Lawler.
"Risk avoidance is still reigning supreme before the interest rate decision from the Federal Reserve on Wednesday."
London's benchmark FTSE 100 index shed 0.62 percent to 6,377.47 points in afternoon trading, after news of a third-quarter slowdown for the British economy.
In the eurozone, the Paris CAC 40 fell 0.84 percent to 4,855.85 points and Frankfurt's DAX 30 gave up 0.66 percent compared with Monday's close to 10,730.57 points.
Traders are hoping for more guidance on the Fed's timetable for raising interest rates, with speculation brewing that it will delay any move until next year owing to recent turmoil on global markets and weakness in China.
The Fed is expected to again delay raising borrowing costs and leave its key rate near zero, where it has stood since December 2008 to stimulate economic growth.
US stocks opened lower Tuesday, with data showing another fall in durable goods orders and mixed earnings underscored worries about declining revenue at many companies.
Five minutes into trade, the Dow Jones Industrial Average had slid 0.36 percent to 17,558.74.
The broad-based S&P 500 fell 0.41 percent to 2,062.74, while the tech-rich Nasdaq Composite Index dropped 0.26 percent to 5,021.51.
New US durable goods orders fell for a second straight month in September, by 1.2 percent, highlighting persistent sluggishness in the manufacturing sector.
Dow members DuPont and Pfizer and delivery giant UPS were among the companies reporting lower sales, a trend that analysts say also is indicative of slow growth.
- New BoJ stimulus -
Most Asian markets also retreated Tuesday as investors look ahead to a central bank meeting in Japan as well this week.
In London trading, the US dollar fell to 120.30 yen from 121.07 yen late Monday in New York and the euro dipped to $1.1056 from $1.1059 over the same period.
The yen was edging up ahead of a Bank of Japan (BoJ) meeting where it faces pressure to unveil fresh stimulus following a string of below-par economics data.
Calls for more measures have grown since China's interest rate cut last week and hints from European Central Bank that it could widen its own easing programme in December.
"The Fed and the BoJ meetings this week are pivotal events that will determine whether this rally can go any higher," Angus Nicholson, an analyst at IG Markets Ltd. in Melbourne, told Bloomberg News.
"If we see the Fed push back raising interest rates toward 2016 and the BoJ step up stimulus, that will have a big positive impact on equities."
Back in London, energy giant BP's share price fell 1.70 percent to 377.85 pence as investors digested better than expected third-quarter results.
BP said profits collapsed as oil prices halved on back of the stubborn global supply glut.
However profit adjusted to reflect the value change in oil inventories sank 40 percent to $1.82 billion from $3.04 billion, beating market expectations of $1.26 billion.
"BP have managed to surprise the market," noted Mike McCudden, head of derivatives at online broker Interactive Investor.
In Milan, the Italian government pushed forward with its biggest privatisation in over a decade by listing over a third of shares in the postal service.
The shares, launched at 6.75 euros, immediately shot up to 6.95 euros but then fell back to 6.71 in afternoon trading.
The listing, which at 6.75 euros per share valued the postal service at 8.8 billion euros, should bring the Italian state nearly 3.4 billion.
Milan's main index was down 0.44 percent in afternoon trading.
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