LONDON: European equities fell on Thursday, led down by exporters as the euro strengthened against the dollar after the U.S. Federal Reserve flagged fewer rate rises this year than expected.
However, miners surged as a weaker dollar made metals more affordable to consumers who buy them in non-dollar denominated currencies, boosting industrial metals such as copper and aluminium.
The FTSEurofirst 300 index fell 1.1 percent, a day after the Fed held rates steady and indicated that while moderate U.S. economic growth and "strong job gains" would allow it to raise rates this year, policymakers now expect two quarter-point hikes by the year's end, half the number foreseen in December.
The STOXX Europe 600 Automobile and Parts index slipped 2.5 percent, dragged down by a 2.9 to 3.6 percent fall in BMW, Daimler, Renault and Peugeot.
"Stocks are moving lower on the back of the euro's advance. We're just consolidating some of the gains made over the last month," said Clairinvest fund manager Ion-Marc Valahu, pointing to the FTSEurofirst's gain of about 10 percent over the last month.
The European Banks index also fell 2.6 percent following the Fed statement, with KBC, Deutsche Bank , Unicredit and Commerzbank falling 3.9 to 5.0 percent.
Lufthansa shares fell 5.6 percent after the airline reined in its profit expectations, while Immofinanz slumped 10.5 percent after reporting a loss.
The dominance of export-oriented companies in Germany's DAX also weighed on the index which fell 1.7 percent, underperforming the broader market.
Austria's benchmark ATX fell 1.2 percent, hit by the slump in Immofinanz shares as well as a 16.7 percent fall in Vienna Insurance, whose results disappointed investors.
Bucking the trend, the STOXX Europe 600 Basic Resources index surged 4.7 percent after the dollar weakness, with shares in Glencore, Antofagasta, BHP Billiton and Rio Tinto jumping between 4.9 and 8.2 percent.
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