Investors Await Fed Decision Amid Mixed European Market Performance

European shares were subdued on Tuesday with investors exercising caution ahead of the Federal Reserve's policy meeting and upcoming Eurozone inflation data. Gains in technology and oil stocks offered some support. The STOXX 600 index slightly rose, while significant movements in individual stocks like BP and Standard Chartered are noted.

European shares remained subdued on Tuesday as investors exercised caution ahead of the Federal Reserve's monetary policy meeting and upcoming Eurozone inflation data. Despite the uncertainty, gains in technology and oil stocks helped keep the market afloat.

As of 0830 GMT, the pan-European STOXX 600 index had gained 0.1%, reaching 512.44 points. The technology sector saw a minor rise of 0.1%, buoyed by anticipated earnings reports from tech giants Microsoft and AMD later in the day. Globally, tech shares have been under pressure following disappointing results from Tesla and Alphabet last week. "Strong results may not spark the same enthusiasm as in previous quarters if companies don't confirm AI's positive impact on their revenues," said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.

In other major developments, the Federal Reserve is set to commence its two-day policy meeting on Tuesday, with investors widely expecting a rate cut as early as September. "The Fed decision will likely not ignite any fireworks as Chair Jerome Powell is expected to hint at an upcoming rate cut," Ozkardeskaya added. Additionally, Eurozone preliminary GDP and consumer confidence data, along with various inflation readings, are due later in the day. Germany's economy unexpectedly contracted by 0.1% in Q2, affecting its benchmark DAX, which ticked slightly lower by 0.2%.

Among individual stocks, Diageo was a significant drag on the STOXX 600, plummeting 10% after reporting a 4.8% decline in annual profit, impacting the beverages sector. Conversely, BP surged 2.1% after exceeding market expectations and announcing an increased dividend and share repurchasing program. Standard Chartered also saw a substantial 5.7% rise after unveiling its largest share buyback and raising its annual earnings forecast. British wealth manager St James's Place soared 20.6% on news of substantial planned cost cuts.

(With inputs from agencies.)