European stocks fall as focus shifts to central bank meetings

European stocks fell on Tuesday, dragged down by healthcare stocks, as investors refrained from aggressive bets and expected another round of interest rate hikes by major central banks this week.

The pan-European Stoxx 600 index fell 0.2% by 0816 GMT, but was on track to end January on a positive note, supported by hopes for better-than-expected corporate earnings and economic resilience.

Rheinmetall shares, which fell by five percent after offering convertible bonds, were the biggest drag among industrial stocks, while Novo Nordisk and AstraZeneca pushed the healthcare sector lower.

AnyCredit jumped 8.1% to the top of the Stoxx 600 index after the Italian bank pledged to return 5.25 billion euros ($5.69 billion) to investors based on its results in 2022, after achieving its best profit in more than a decade.

Shares of UBS Group tumbled 2.6 percent after the world’s largest wealth manager predicted that next year would be “uncertain”.

The US Federal Reserve begins its two-day meeting on Tuesday and is widely expected to raise interest rates by 25 basis points to 4.50-4.75 percent.

Meanwhile, the European Central Bank and Bank of England are expected to raise interest rates by 50 basis points each, to 2.50% and 4%, respectively, on Thursday.