European Markets Stumble Amid Economic and Political Tensions

European shares saw slight declines on Wednesday following a robust gain, as investors focused on fiscal policies in the U.S. and Europe. The STOXX 600 fell 0.1% while Germany's index dropped 0.3%. Key sectors like aerospace benefitted, while resources and real estate sectors reported losses.

European shares experienced minor declines on Wednesday, following the previous day's robust gains sparked by Germany's approval of significant spending measures. Investors' attention has now shifted to the U.S. Federal Reserve's imminent interest rate decision.

The pan-European STOXX 600 fell by 0.1% at 0931 GMT, after three consecutive gains. Germany's blue-chip index dropped 0.3%, despite Tuesday's jump triggered by parliamentary approval of large-scale fiscal reforms to boost economic and military growth. Meanwhile, Barclays raised its year-end target for the STOXX 600, pointing to Germany's financial initiatives.

The Federal Reserve is expected to keep rates unchanged, with market watchers keenly analyzing comments on the trade war's impact under the Trump administration. In parallel, the Bank of England is also likely to hold rates. Basic resources led the losses, declining by 1.1%, while the oil and gas sector rose by 0.3%, partly fueled by optimism over a potential ceasefire in Ukraine.

(With inputs from agencies.)