European markets inch higher as investors react to Fed hike

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

The pan-European Stoxx 600 gained 0.4% in early trade, with travel and leisure stocks adding 1.6% 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 came from Audi, Veolia, Ocado and Deliveroo on Thursday and the Bank of England announces its latest monetary policy decision.

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