* Carl Zeiss drops as BofA Merrill starts with
'underperform'
* Colruyt slides after cautious outlook
* Focus on Fed statement, Jerome Powell's speech
* Trump says to meet Xi at G20, trade talks to resume
(Updates to close)
By Medha Singh and Susan Mathew
June 19 (Reuters) - European stock markets closed little
changed on Wednesday in anticipation of the U.S. Federal Reserve
policy statement, a day after European Central Bank's dovish
calls raised hopes of a more accommodative Fed.
The pan-European index finished up 0.05% with defensive
stocks weighing the most, while banks .SX7P posted a 1.4%
rise.
"There is still an element of risk appetite, thanks to the
ECB and hopes that the Fed will deliver a rate cut," said Mike
van Dulken, Head of Research at Accendo Markets.
"It might not be imminent but the potential for that before
the end of the year is enough for markets to keep holding risk
further."
ECB chief Mario Draghi flagged a potential return to
bond-buying and lower interest rates if the economy does not
improve, sending the STOXX 600 STOXX index to its best
performance in five months on Tuesday.
The U.S. central bank is expected to echo the ECB's easing
policy stance at the end of its two-day meeting at 1800 GMT
followed by a press conference by Chaiman Jerome Powell.
Expectations of policy easing by the ECB and the Fed has
helped the STOXX 600 recoup most of those losses from last
month.
Auto stocks .SXAP were also up 1%, continuing their rally
spurred by news that China and the United States are rekindling
trade talks ahead of the G20 meeting next week. The resumption in trade talks after a lull also lifted
chipmakers, with Germany's Siltronic WAFGn.DE recovering
nearly 5% after falling sharply on Tuesday.
Corporate newsflow saw CYBG CYBGC.L gain 6.2% after the
British lender pledged to make an additional 50 million pounds
($62.75 million) in savings from its takeover of rival Virgin
Money. Meanwhile, Belgian food retailer Colruyt COLR.BR tumbled
15.5%, and was the biggest decliner on the STOXX, after the
group warned about a deteriorating economic climate in France
and Belgium.
Medical technology supplier Carl Zeiss AFXG.DE slid 5.5%,
after Bank of America Merrill began coverage of its shares with
an "underperform" rating.
Italy's FTMIB .FTMIB was notably higher. Deputy Prime
Minister Matteo Salvini said on Tuesday Rome would press ahead
with a plan to settle overdue state payments by issuing
mini-bills unless a better solution was put forward.
"It would give them (Italy) a short term reprieve and help
with some of the overdue payments. Although they still need to
sort out their budget deficit and the like, this is at least a
short-term solution," van Dulken said.
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Price performance of Italy's MIB and STOXX 600 https://tmsnrt.rs/2IprexA
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(Reporting Amy Caren Daniel, Medha Singh and Susan Mathew in
Bengaluru;
Editing by Patrick Graham)