European shares came off session highs on Thursday, as a slew of downbeat earnings including from Santander took the shine off a global rally driven by easing worries about the future pace of US interest rate hikes.

The US Federal Reserve raised its main interest rate by 75 basis points as expected and reiterated inflation control as priority, but dropped guidance on the size of its next rate hike and noted that “at some point” it would be appropriate to slow down.

“The Fed was quite cautious that things could continue to get harder before we see some sort of recovery, and I think markets at least had some clarity there,” said David Jones, chief market strategist at Capital.com.

“The Fed also saying we’re not in recession yet is something that perhaps helped market outlook.”

The pan-European STOXX 600 index (.STOXX) rose 0.2 per cent, trimming some gains that took it to seven-week highs.

Investors this year have been beset with worries that aggressive central bank attempts at controlling surging inflation could tip economies into recession. The energy crisis in Europe, stoked by the Russia-Ukraine war, has added to worries.

While euro zone inflation is at a record high of 8.6 per cent, investors eye German consumer prices, due later in the day, which are seen cooling further on the year in July.

“The macro picture is still bad, but markets perhaps think we’re past the top of the inflation peak,” Jones said, pointing to the recent downtrend in commodity prices.

Milan’s main stock index (.FTMIB) jumped 1.2 per cent as upbeat results lifted carmaker Stellantis (STLA.MI) and chipmaker STMicroelectronics .

Luxury stocks got a boost from puffer jacket maker Moncler’s (MONC.MI) sales beat. Moncler rose 5.1 per cent, while Louis Vuitton owner LVMH (LVMH.PA) gained 1.6 per cent, providing the biggest boost to the STOXX 600.

Shell (SHEL.L) gained 0.8 per cent after the oil major posted its biggest quarterly profit ever.

Europe’s mining index (.SXPP) jumped 3.2 per cent to hit four-week highs as base metals and iron ore prices rose on Fed relief. This helped Anglo American (AAL.L) rise 5.0 per cent despite posting downbeat results.

Spain’s IBEX (.IBEX) slumped 1.4 per cent as the euro zone’s second-biggest lender, Santander (SAN.MC), fell on missing profit estimates.

Planemaker Airbus (AIR.PA) and consumer company Nestle (NEST.NS) were among other heavyweights that fell after reporting their results.