BENGALURU: European shares gave up early gains and closed lower on Wednesday as investors exercised some caution ahead of the US Federal Reserve’s interest rate hike decision later in the day.

The pan-European STOXX 600 index slipped 0.3% to snap a three-day winning run that took it to near seven-week highs.

Wall Street’s main indexes also slipped after a bigger-than-expected increase in October private payrolls offered more evidence of labour market resilience, suggesting that the Fed could stick to its aggressive rate hikes for a while.

The US central bank is widely expected to hike its benchmark lending rates by 75 basis points for the fourth time in a row at 2 p.m. ET (1800 GMT), with some pricing in a smaller 50 bps rate hike in December.

“The Fed is expected to bring in another super-sized rate hike of 0.75%, but that has been priced in. Instead it is the words that Chair Jerome Powell chooses to use, about the economic outlook and what the future may hold, that will be in focus,” said Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown.

“There are high hopes that he will signal that there could be some softening in the US central bank’s aggressive approach to taming inflation.” Personal & household goods, miners and technology sectors in Europe were among the worst hit, down between 1.3% and 1.8%.

Bucking the trend was the healthcare sector, boosted by a 7.4% jump in Novo Nordisk after it raised its full-year earnings outlook.

The STOXX 600 posted solid gains last month as a better-than-expected earnings season eased some worries about the euro zone slipping into a recession as the European Central Bank (ECB) promised more monetary policy tightening.