European shares retreat, FOMC eyed

LONDON Wed Feb 20, 2013 3:13am EST

LONDON Feb 20 (Reuters) - European shares retreated on Wednesday after the previous session's sharp gains, digesting a crop of weak corporate earnings and as traders cited caution ahead of the minutes to the U.S. Federal Reserve's January policy meeting.

Germany's biggest airline Deutsche Lufthansa shed 2.4 percent after it announced plans to suspend its dividend payment, while posting a net profit of 990 million euros ($1.32 billion) in 2012.

The FTSEurofirst 300 was down 0.2 percent at 1,168.66 by 0810 GMT, having jumped 1.1 percent on Tuesday fuelled by robust German sentiment data.

"I see no reason why we can't consolidate the gains and possibly move higher. I certainly think that central bank policy is going to remain accommodative," Michael Hewson, analyst at CMC Markets, said.

"I think the only potential fly in the ointment could be a slightly more hawkish tone from certain Fed members with respect to the duration of quantitative easing."

The U.S. Federal Reserve releases the minutes of its Federal Open Market Committee meeting after market close.

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