European stocks were trading under pressure early Tuesday amid caution ahead of the U.S. Federal Reserve's two-day monetary policy meeting that begins later today.
After logging sharp gains yesterday, stocks turned negative Tuesday as investors sought to profit booking ahead of the day's key event.
Speculations are rife that the Fed might decide reducing its monthly bond purchase program by some quantum, if not announce a complete pullback at this policy review meet.
Monday's gains were inspired by Lawrence Summers' withdrawal from the contest to be the next Fed chairman, which increased the likelihood of Janet Yellen's appointment as Bernanke's successor. Investors believe Yellen would adopt a slightly less aggressive approach in pulling back the Fed's easy monetary policies.
In economic reports, a batch of data was released in the Great Britain today, including consumer and producer index readings.
Meanwhile, a separate report showed the euro-zone's current account suprlus narrowed again in July, falling for the fourth straight month.
Later in the day, German ZEW Economic Sentiment is due, that would shed some light on investor confidence in Europe's largest economy.
Stocks on the Move
Financials across the region were trading with modest cuts, with London based Lloyds Banking Group Plc. in focus. Lloyds Banking fell over 2% after the UK government sold a 6% stake in the lender.
Barclays Plc. was also down 2% while HSBC Holdings erased 0.7%.
In France, BNP Paribas SA and Societe Generale SA gave up around a percent while German lender Commerzbank AG plunged 3%. But Deutsche Bank AG managed to stay afloat despite the selling pressure, adding 0.6%.
Miners were listless too-- top miner BHP Billiton Plc. slipped 0.5% while Rio Tinto Plc. lost 1%. Glencore Xstrata Plc. fell 2.7%.
In corporate moves, German automotive supplier Schaeffler said it sold a 3.9% stake in Continental AG for around 950 million euros. Shares of Continental AG dropped 3.7% on heels of the announcement.
French manufacturer of trains and power equipment Alstom SA said it bagged a 170 million euros contract in Saudi Arabia. Shares of Alstom fell 1%, however.