Updates to after markets close

By Niket Nishant, Avinash P and Johann M Cherian

Jan 28 (Reuters) - European shares fell on Wednesday, weighed down by a slide in luxury stocks, while caution prevailed ahead of a run of tech sector results and the U.S. Federal Reserve's interest rate decision.

The pan-European STOXX 600 .STOXX index ended 0.7% lower at 608.51 points, with luxury shares .STXLUXP leading sector declines with a 3.8% fall, their fourth consecutive day of losses.

Shares of LVMH LVMH.PA, the owner of Louis Vuitton and Tiffany, dropped 7.9% after CEO Bernard Arnault said he was cautious about the year ahead.

"Given the cautious commentary from the company and mixed macroeconomic data, the recovery in demand may be somewhat delayed," Morningstar's senior equity analyst Jelena Sokolova said.

Gucci owner Kering PRTP.PA lost 3%, Moncler MONC.MI fell 2.9% and Hermes HRMS.PA dropped 3.7%.

Investors were also gearing up for quarterly updates from Meta META.O and Microsoft MSFT.O later in the day. Their reports will be scrutinised for how the AI leaders are monetising the technology, at a time when elevated corporate spending has kept markets on edge.

Chip equipment maker ASML ASML.AS eased worries about a near-term slowdown in demand after reporting stronger-than-expected fourth-quarter bookings. Broader caution around the sector, however, left the shares closing down 1.9% after an initial jump to a record high.

"While the stock's valuation multiples are high even with the 2026 guidance, the order strength and positive industry news flow is likely to provide further medium-term upside," Jefferies analysts said.

Deutsche Bank <DBKGn.DE> fell 1.9% after federal police searched its offices in Frankfurt and Berlin in an investigation related to money laundering, Frankfurt prosecutors said.

On the data front, Germany lowered its growth forecasts for this year and next, citing heightened uncertainty around global trade and the slower‑than‑expected impact of economic and fiscal measures.

Focus now turns to the Fed's rate decision later in the day. The central bank is widely expected to hold rates steady, with attention centred on risks to its independence.

Among individual movers, Nordnet <SAVE.ST> added 8.1% after the Swedish online broker reported a fourth-quarter beat on adjusted operating profit.

Investors were also monitoring currency markets, which are crucial for European exporters. The euro EUR= has been rallying since last year and hit the $1.20 mark on Tuesday - a level seen as a pain threshold by policymakers.

(Reporting by Niket Nishant and Avinash P in Bengaluru. Editing by Sonia Cheema, Shilpi Majumdar and Mark Potter)

((Niket.Nishant@thomsonreuters.com))