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Kering flags Q1 sales drop, top decliner on STOXX 600

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Lonza to buy biologics site from Roche in US for $1.2 bln

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Johnson Matthey to sell medical device parts unit for $700 mln

(Updated at 8:58 GMT)

By Khushi Singh

March 20 (Reuters) - European shares moved lower on Wednesday, weighed down by a sell-off in luxury stocks over sales warning from Kering, while investors remained cautious ahead of Federal Reserve's monetary policy outcome due today.

The pan-European STOXX 600 index was down 0.2% by 8:58 GMT.

Leading sectoral declines, the personal and household goods index fell 1.9%, pressured by a decline in the European luxury stocks.

Kering shares tumbled 14.8% after the French luxury goods group warned its first-quarter sales are likely to drop by around 10%, weighed down by star label Gucci due to weakness in Asia. The stock looks set for its biggest one-day drop on record if losses persist.

Combined with a profit warning from Burberry in January, the high-end sector is grappling with a worsening slowdown in demand for luxury goods.

In a sector-wide reaction, other luxury stocks such as LVMH , Burberry, Richemont and Christian Dior dropped between 3% and 5%.

"Sales in China generally have been an issue from a wider perspective in luxury sector but we are seeing manufacturing, export activity pick up in China so we could see the Chinese consumer sentiment start to stabilize and recover as well," Gene Salerno, chief investment officer at SG Kleinwort Hambros, said.

On the data front, German producer prices fell year-over-year in February, while highly-anticipated British inflation cooled slightly more than expected last month.

Later in the day, investors will look out for Italy's January industrial output data, along with euro zone consumer confidence survey for the month of March.

However, key focus remains on the Fed's monetary policy meeting, where the central bank is considered certain to keep interest rates on hold, while all eyes will be on its dot plot for more clues on the future path for rates.



Meanwhile, a series of deals from the region also contributed to market action.

Shares in Lonza rose 4.4% after the Swiss contract drug manufacturer agreed to buy Roche's Genentech manufacturing facility in California for $1.2 billion in cash.

Johnson Matthey climbed 7.2% to the top of STOXX 600 after the catalytic converters and pollution filters maker announced the sale of its medical device components business to Montagu Private Equity for $700 million.

French business support firm Bureau Veritas rose 4.3% after it announced acquisition of three companies in South and north-east Asia. (Reporting by Khushi Singh in Bengaluru; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala)