European shares rise as banks lead gains

European shares edged higher on Thursday, helped by a rise in banks after the U.S. Federal Reserve cut interest rates but set a higher bar for further reductions.

European banks rose 1.1%, the most among the major sectors. The pan-European STOXX 600 index rose 0.2% with lender-heavy Milan and Madrid outperforming.

The FTSE 100 index was 0.1% lower ahead of a Bank of England monetary policy statement at 1100 GMT, where it is expected to stand pat on rates. Wartsila was the worst performer on the STOXX 600 on an HSBC price target cut after the Finnish engineering group warned on 2019 profit on Wednesday.

European steel stocks ArcelorMittal, Salzgitter, Voestalpine, SSAB, Outokumpu and Thyssenkrupp declined after United States Steel's gloomy current-quarter earnings forecast.

Also Read: China cuts banks' reserve ratios, frees up $126 bln for loans as economy slows