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Europe stocks little changed

25/06/2003 17:01
Markets take a cautious approach to Fed rate decision due later Wednesday.

European stocks shed early gains Wednesday to trade at break even ahead of a much-anticipated U.S. interest rate decision, with Interbrew soaring after a bullish sales outlook.

At 7:25 a.m. ET (1125 GMT), London's FT-100 was flat, Paris' CAC-40 was up 0.2 percent and Frankfurt's DAX was down 0.4 percent.

Europe's stock markets took a stronger-than-expected German Ifo business sentiment indicator in their stride as investors held back ahead of the U.S. Federal Reserve's rate move, due later Wednesday.

Fund managers said markets were consolidating as investors waited for signs of recovering corporate earnings amid fears that a five-month European stock market rally had outpaced prospects for corporate profits.

"We are facing further consolidation in the short- to medium-term as investors wait for high-quality companies such as Unilever to give signs of stronger performance," said Juergen Lukasser, a global fund manager for Constantia Privatbank in Vienna which has about five billion euros under management.

"And for the moment, what we are likely to see is more of these companies coming out with lower guidance."

Interbrew jumped as much as 6.4 percent to 19.15 after the brewer said it saw volume growth during the first five months of 2003 and expected "meaningful" full-year growth.

The well-received update from Interbrew, owner of global brands including Stella Artois, came two days after a sales warning from Dutch sector peer Heineken shook the industry.