European markets edge higher as investors react to Fed hike

LONDON — European stocks nudged higher on Thursday as investors reacted to the U.S. Federal Reserve's first rate hike in years.

The pan-European Stoxx 600 gained 0.5% in early trade, with oil and gas stocks adding 1.5% to lead gains as most sectors and major bourses entered positive territory.

Global markets are digesting the Federal Reserve hiking its benchmark interest rate for the first time since 2018 and signaling six more hikes this year.

U.S. stock futures were little changed in early premarket trade as investors also assessed the latest projections from the Fed, which significantly raised its projections for inflation in 2022.

Shares in Asia-Pacific rose on Thursday as Chinese markets continued to extend gains from a rebound, with Hong Kong's Hang Seng index surging more than 6% to erase heavy losses earlier in the week.

The war in Ukraine is also dominating headlines. Reports of progress on ceasefire negotiations helped boost stocks on Wednesday and after Ukrainian President Volodymyr Zelenskyy delivered an emotive address to the U.S. Congress, President Joe Biden also approved additional weapons to be sent to Ukraine.

Earnings in Europe came from Audi, Veolia, Ocado and Deliveroo before the bell on Thursday, and the Bank of England announces its latest monetary policy decision later in the day.

In terms of individual share price movement, Italian biotech firm DiaSorin climbed more than 9% in early trade to lead the Stoxx 600 after reporting strong full-year results.

At the bottom of the index, German conglomerate Thyssenkrupp fell more than 7% after its CEO said in an internal memo seen by Reuters that the war in Ukraine had forced the company to reassess its spending and potential spin-off of its steel division.

— CNBC's Jesse Pound contributed to this market report.