The pan-European Stoxx 600 dropped 0.3% during the morning session, with food and beverage stocks leading losses on a 0.8% slide while only a handful of sectors started the session in positive territory. Bank stocks were the strongest performers, the sector rising 0.6% as CYBG, Commerzbank and Caixabank and Bankia all jumped by around 2%.

· Asian shares pulled ahead on Wednesday while rising Treasury yields lifted the dollar as investors waited anxiously to hear if the world’s most powerful central banker would confirm or confound expectations for U.S. easing this month.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS advanced 0.4%, after three sessions of losses.

A worrying lack of inflation globally is one reason investors are counting on Federal Reserve Chair Jerome Powell to sound suitably dovish when testifying to Congress on Wednesday.

· Japan’s Nikkei edged down on Wednesday, confined to a tight range as investors awaited key testimony on the U.S. economy from Federal Reserve Chairman Jerome Powell.

The Nikkei share average ended the day down 0.15% at 21,533.48.

Markets are bracing for Powell’s comments, in two days of testimony before the U.S. Congress starting later on Wednesday, in which he may support or confound expectations for U.S. policy easing.

Global equities had advanced earlier this month on the prospect of the Fed easing monetary policy. But the markets have lost some momentum recently as the prospect of aggressive easing has faded after a stronger-than-expected U.S. jobs report.

· Chinese shares fell on Wednesday as flat producer price inflation fuelled concerns about domestic growth, and a flood of initial public offerings targeting Shanghai’s new tech board diverted funds from the rest of the market.

At the close, the Shanghai Composite index was down 0.44% at 2,915.30.

Reference: CNBC, Reuters