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Europe: Shares retreat from 11-month high, Actelion and Colruyt fall

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[LONDON] European shares fell from an 11-month high on Wednesday, with Switzerland's Actelion slumping after US healthcare company Johnson & Johnson ended discussions over a potential deal with Europe's largest biotech firm.

Actelion shares fell 9.2 per cent after J&J said it was not able to reach an agreement that it believed would create adequate value for its shareholders. J&J said in November it was in preliminary talks about a takeover of Actelion, then valued at about US$20 billion.

Sources said Actelion was now in talks with French drugmaker Sanofi about a deal. Sanofi shares fell 2.6 per cent.

Colruyt also put pressure on the broader market as its shares fell 9.4 per cent after the Belgian supermarket group announced results late on Tuesday. Even though net profit beat market expectations investors were disappointed by its weak growth outlook.

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The pan-European Stoxx 600 ended down 0.5 per cent, with healthcare and consumer staples sectors the biggest drags on the benchmark index.

Investors awaited a policy meeting of the US Federal Reserve for hints about the market's near-term direction. A quarter point move is priced in, as are two more hikes next year. Any hint that the Fed may move more aggressively could affect various markets.

"Although there should be no surprises given the very much anticipated 25 basis points hike at today's meeting, the FOMC's accompanying statement and the Fed's dot plot will set the primary tone for the 2017 outlook for the US monetary policy," said Ipek Ozkardeskaya, analyst at London Capital Group.

Italian banks fell 2.8 per cent. Rating agency Moody's changed its outlook on the Italian banking sector to negative from stable late on Tuesday due to increasing capital needs and weakening confidence.

Shares in Monte dei Paschi di Siena fell 2 per cent as the troubled Italian lender confirmed the European Central Bank had rejected its request for more time to raise capital.

The Greek blue chip index fell 3.2 per cent, weighed down by heavy losses among its banks after the euro zone's bailout fund said it had put short-term debt relief measures for the country on hold.

However, strong gains by some companies limited losses.

German retailer Metro jumped 3.6 per cent after reporting better than expected fourth-quarter operating profit for the food and consumer electronics businesses it hopes to split in a demerger next year.

Mediaset extended the previous session's 30 per cent rally and was up 1 per cent as top shareholder Fininvest and Vivendi both raised their stakes in the Italian broadcaster. Mediaset shares have jumped more than 75 per cent in about two weeks.