By Sruthi Shankar

(Reuters) – European stocks edged higher Thursday as Wall Street saw overnight gains. The U.S. interest rates hike was widely expected, but lingering optimism over the Russia-Ukraine conflict talks kept sentiment largely positive.

The pan-European indicator rose 0.2% to offset losses from March, when financial markets were shook by concerns about Ukraine.

Wall Street indexes rose on Wednesday, as investors welcomed the U.S.’s long-awaited start to monetary tightening. According to expectations, the Federal Reserve raised interest rates by 25% and signaled that there would be equivalent rate hikes at all future meetings.

“It’s not surprising what the Fed stated regarding further rate rises. “What is most concerning for the market, however, is the confirmation that quantitative tightening will occur sooner or later,” Salvatore Bruno from Generali Investments Partners said.

“The Fed stated that the U.S. economic strength is sufficient to be able absorb tightening. Markets took this positive news as well.”

Investors also increased their bets on a European Central Bank rate rise and valued in excess of 50 basis points of increase.

The gains in Europe were led by commodities stocks, and the energy sector grew 1.4% after crude oil prices climbed around 3% following warnings from the International Energy Agency. [O/R]

As China’s top metals buyer China hopes for more stimulus measures, miners saw a 0.4% increase. Aluminium and Shanghai prices also rose 0.4%. [MET/L]

While most euro zone markets were down, the UK’s was steady ahead of the Bank of England meeting. Policymakers expect to raise interest rates. ()

Thyssenkrupp in Germany (DE:), fell 10.7% following the suspension of its 2021/22 forecast to free cash flow prior to mergers and acquisitions. It also stated that it wasn’t certain if it could still spin off its steel division.

Deliveroo, a British food delivery company, saw 8.8% increase after stating that it wanted to breakeven on core earnings within two years.

Veolia in France, which manages France’s water- and waste management companies, saw its income rise by 1.4%.