European shares steady as investors cling to Mideast peace hopes

European shares were steady at the open on Wednesday as investors held on to hopes for peace in the Middle East, while focus was also on the European Central Bank’s upcoming monetary policy decision.

The pan-European STOXX 600 index edged 0.1% higher to 619.88 points by 0710 GMT, with most sectors marginally higher.

Crude oil prices hovered near $90 a barrel after U.S. and Iran traded fresh strikes, clouding the outlook for an imminent end to the conflict. Traders, however, clung to remarks by President Donald Trump that a deal to reopen the Strait of Hormuz, a vital artery for global oil supplies, was close.

The European Central Bank’s two-day meeting on monetary policy will start on Wednesday, at the end of which it is widely expected to raise interest rates by 25 basis points to combat rising energy costs. However, the bigger focus will be on policymakers’ remarks on the outlook for monetary policy.

A U.S. inflation report is also due later in the day, which could offer clues on the Federal Reserve’s monetary policy path.

STMicroelectronics gained 2.9% after brokerage BofA Global Research upgraded the chip stock to ‘buy’ from ‘neutral’, while peer Infineon added 2.6%.

UK lenders, which fell in the previous session following a J.P. Morgan note flagging greater impact of new Chinese rules, extended losses on Wednesday. HSBC and Standard Chartered slipped over 1% each. Kongsberg rose 3.2% after the defence group said on Wednesday that it aims to triple its revenue by 2020, driven by growing military investments in Europe.