European shares climb on Fed rate-cut hopes, Ukraine peace progress; UK budget awaited

Nov 26 (Reuters) - European shares inched higher on Wednesday, supported by mounting expectations of U.S. rate cuts and signs of movement in Ukraine peace talks, while investors waited for the UK's budget announcement.

The pan-European STOXX 600 .STOXX rose 0.4% to 570.25 points by 0807 GMT, after posting its strongest daily gain in two weeks on Tuesday.

Major regional indexes were also firmer, with Germany’s .GDAXI and France’s .FCHI both up 0.5%.

London’s FTSE 100 .FTSE added 0.2% ahead of the UK’s autumn budget, where Finance Minister Rachel Reeves is expected to outline tens of billions of pounds in tax increases.

European markets drew from upbeat investor sentiment globally as expectations for another U.S. Federal Reserve rate cut in December grew, following soft economic data on Tuesday.

Progress on a Russia-Ukraine peace deal also buoyed sentiment after Ukrainian President Volodymyr Zelenskiy signalled readiness to push forward a U.S.-backed framework to end the war.

Still, defence stocks were higher on the day, with the broader index .SXPARO up 0.8%.

Among individual stocks, Germany's Puma PUMG.DE gained 1.9%, after U.S. peer Urban Outfitters URBN.O reported third-quarter revenue above estimates.