European Shares Fall Ahead of U.S. Federal Reserve Decision

European shares fell on Wednesday as investors held back before a key interest rate decision by the U.S. Federal Reserve. The pan-European STOXX 600 index dropped 0.5%, with significant losses in the food and beverages sector and the healthcare sector. Focus shifted to the upcoming U.S. central bank rate decision.

European shares took a hit on Wednesday as investors hesitated ahead of a crucial interest rate decision by the U.S. Federal Reserve, potentially signaling the start of a monetary easing cycle in the world's largest economy.

The pan-European STOXX 600 index dipped 0.5%, led by a 1% decline in the food and beverages sector. Notably, shares of Italian spirits giant Campari plunged 7.5% following the unexpected resignation of CEO Matteo Fantacchiotti after just five months in the role, attributed to personal reasons.

The healthcare sector was also down, with a 0.7% drop, as Danish pharmaceutical firm Novo Nordisk saw its shares fall by 2.4%. The U.S. central bank's interest rate decision, expected at 1800 GMT, has placed the market in a state of high anticipation. According to CME's FedWatch Tool, there's a 53% probability of a 50-basis-point cut, although Goldman Sachs economists predict a more modest 25-basis-point reduction. Meanwhile, in Britain, inflation data for August remained steady, placing pressure on the Bank of England, which might keep interest rates unchanged on Thursday. The FTSE 100 index fell by 0.7%, while the British pound gained 0.3% against the dollar.

In individual stock movements, Germany's BASF rose 2.4% amid reports of a planned initial public offering of its agricultural chemicals division. France's Ubisoft Entertainment saw a 6.6% jump after BMO Capital Markets upgraded its stock rating to 'outperform,' citing undervaluation.

(With inputs from agencies.)