Europe: Shares slip on Fed's downbeat economic view

[LONDON] European shares fell on Friday as the US Federal Reserve's downbeat comments on the state of the global economy overshadowed its decision to keep interest rates on hold.

The Fed left interest rates unchanged on Thursday amid worries about the global economy, financial market volatility and sluggish inflation at home. It left open the possibility of modest rate rises later this year.

The pan-European FTSEurofirst 300 index dropped 1 per cent while the euro zone's blue-chip Euro STOXX 50 index fell 1.2 per cent.

Traders said uncertainty over when the Fed would eventually raise rates was adding further pressure to markets. "It's the uncertainty over the state of the economy, and a sense of unfinished business over when the Fed will make its move, that is weighing on markets," said Mirabaud Securities'senior equity sales trader John Plassard.

REUTERS