European shares fall ahead of ECB meeting outcome

European shares fell on Thursday as investors digested mixed signals from the U.S. Federal Reserve on its interest rate path, while awaiting the European Central Bank's rate decision later in the day.

The pan-European STOXX 600 index dropped 0.8%, with automobile shares leading the losses, falling 2.3%.

The oil and gas index was the sole gainer, rising 1.3%.


The Fed raised its key benchmark rate by 25 basis points (bps) to the 5.00%-5.25% range as expected, but dropped from its statement that it "anticipates" further hikes would be needed.

However, Fed Chair Jerome Powell later said it was too soon to say the rate hike cycle is over.

All eyes will now be on the ECB's rate decision, due at 1215 GMT, at which the central bank is expected to deliver another quarter percentage point rate hike, but a bigger hike is not ruled out either, as the bloc grapples with sticky inflation.

Shell Plc jumped 2.4% after its first-quarter profit dropped slightly from the previous quarter as energy prices cooled, but still beat forecasts.

Weighing on the index, Danish drug developer Novo Nordisk fell 4.8% after it said it would reduce the supply of some dose strengths of its popular Wegovy obesity drug in the United States due to high demand