European stock markets erased some of the prior day’s sharp gains on Wednesday, while investors awaited a policy announcement from the U.S. Federal Reserve later in the day. Banks such as Standard Chartered PLC and retailer H&M Hennes & Mauritz AB helped curb losses.

The Stoxx Europe 600 index (XX:SXXP) -0.23% nudged 0.2% lower to 247.69, pulling back after a 1.6% rally on Tuesday.

Swedish fashion retailer H&M Hennes & Mauritz AB (SE:HMB) +2.39% helped keep losses in check, rising 2.9% after second-quarter earnings beat analysts’ expectations. H&M’s net profit rose to 5.22 billion Swedish kronor ($748.5 million) in the three months to May 31, from 4.26 billion kronor a year earlier.

Elsewhere, banks were on the rise ahead of the monthly policy announcement from the U.S. Federal Reserve.

Markets were increasingly expecting further easing from the U.S. central bank amid slower economic growth, either through “Operation Twist” or possibly another round of quantitative easing. Under “Operation Twist,” the Fed sells short-term securities and uses those proceeds to buy longer-term securities. The current program expires in June.

U.K. banks did most of the heavy lifting across Europe, with HSBC Holdings PLC (UK:HSBA) +0.38% HBC +2.70% rising 0.6% and Standard Chartered PLC (UK:STAN) +0.95% taking on 1.1%, Market Watch reported. 

The FTSE 100 index (UK:UKX) -0.15% however, pulled back 0.1% to 5,580.45, weighed by drug makers. AstraZeneca PLC (UK:AZN) -0.94% AZN +3.06% shed 0.9% and GlaxoSmithKline PLC (UK:GSK) -0.51% GSK +1.19% fell 0.6%.

Pharma firms were among biggest contributors to the rally on Tuesday.

In France, Sanofi SA (FR:SAN) -0.40% declined 0.6%, adding pressure to the CAC 40 index (FR:PX1) -0.39% , which lost 0.2% to 3,114.37.

Banks bucked the trend in France, with Credit Agricole SA (FR:ACA) +1.40% up 1.4% and Société Générale SA (FR:GLE) +1.23% 1.2% higher.

The German DAX 30 index (DX:DAX) -0.28% gave up 0.2% to 6,349.69. BMW AG (DE:BMW) -2.10% fell the most in the index, down 1.6%.

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