By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks slipped Wednesday, with losses for shares of BNP Paribas SA and Standard Life PLC among those pulling the pan-European equity benchmark back from a strong gain logged in the previous session.
The Stoxx Europe 600 shed 0.2% to 337.61, cutting into the index's 1% rise on Tuesday, which was aided by gains for energy giant BP PLC
In currency action, the euro advanced against the U.S. dollar after Eurostat said a preliminary euro-zone inflation reading for April came in at 0.7%. Analysts had widely expected a rise of 0.8%, mainly because of the timing of Easter. The euro (EURUSD) bought $1.3855, rising from $1.3796 after the report. The shared currency late Tuesday bought $1.3809.
As the April reading came in below expectations, the European Central Bank may face increased pressure to roll out more stimulus measures, including a quantitative-easing program or negative interest rates. Read: Inflation data today could trigger new era for ECB policy
"Although it is clearly a close call, the bottom line is that our view remains that the ECB will do nothing at next week's meeting," resulting in upside for the euro "notwithstanding heavy event risk and thin markets in the interim," said Adam Cole, head of G10 FX strategy at RBC Capital Markets, in a note Wednesday. The ECB policy statement is due Thursday.
Investors later Wednesday will hear from the U.S. Federal Reserve, which is expected to again reduce the size of its bond-buying program. The results of the central bank's meeting are due at 2 p.m. Eastern.
Among Europe's biggest equity decliners, BNP Paribas dropped 4% after the French bank warned that it may pay more than the $1.1 billion it had set aside last quarter to cover potential fines stemming from alleged U.S. sanctions violations.
Standard Life shares gave up 1.6%, after the insurance company said U.K. annuity sales have declined about 50% since the government in March proposed pension-industry changes.
But Europe's top advancer was Alstom SA , extending its gain to 9.4% as the French conglomerate's board backed a review of a roughly $12 billion bid from General Electric Co.(GE) for Alstom's energy business.
Alstom also said it will review any rival offer from Germany's Siemens AG (SI). Siemens's said in a letter to Alstom that Alstom was slow to respond to its original proposal to buy its energy units, which included a cash payment of up to 11 billion euros ($15.2 billion) and a swap of some of Siemens's trains operations.
In country-specific indexes, the U.K.'s FTSE 100 turned up by 0.3% to 6,687.65, led by a more than 4% rise in shares of Royal Dutch Shell PLC (RDSB). Germany's DAX 30 rose 0.1% to 9,593.47, and France's CAC 40 gave up 0.3% to 4,483.98.
Russia stocks were lower, with the blue-chip MICEX index down 0.4% and the RTS index off 0.6% as the International Monetary Fund reportedly said Russia has fallen into recession. International sanctions imposed on Moscow by the U.S. and EU in relation to its role in Ukraine's political crisis are hurting the economy and threatening investments, said Antonio Spilimbergo, the IMF's mission chief to Russia, according to Reuters.
The IMF now expects Russia's economy to grow 0.2% in 2014 forecast, well below its previous forecast of 1.3% growth, Reuters reported.
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