London: European stocks closed more than 1% lower today, dragged down by losses in interest-rate-sensitive sectors as investors remained cautious ahead of the US Federal Reserve's closely watched monetary policy decision due tomorrow. The pan-European STOXX 600 index fell 1.15%, with notable declines of 2% to 2.1% across financials, banks, and insurance shares. Germany's DAX, France's CAC 40, and Britain's FTSE 100 all posted sharp losses.

According to Qatar News Agency, recruitment companies were among the worst hit after SThree issued a profit warning for the current fiscal year, sending its shares tumbling 26% to their lowest level since December 2008. Peers followed lower, with Adecco down 5.1%, Hays off 4.1%, and Randstad slipping about 3%.

By contrast, the luxury goods index edged up 0.2% even as L'Or©al dropped 2.9% after being downgraded by Jefferies. The basic resources index gained 0.34%, supported by rising copper prices.

Among individual movers, Swedish video-game group Embracer jumped 4.7% to a one-month high, topping the STOXX 600 gainers. Thyssenkrupp climbed 4.3% after receiving a non-binding offer from a company within India's Naveen Jindal Group to acquire its steel division.