European shares inched up on Friday, recovering from a two-day rout, with investors focussing on the European Central Bank's policy meeting next week and Italy's political turmoil.

The STOXX 600 index was up 0.1% by 0713 GMT. It slid 2.6% in the last two sessions, as investors worried that hot U.S. inflation could prompt the Federal Reserve to hike interest rates by a bigger-than-expected 100 basis points later this month.

But two of the Fed's most hawkish policymakers saying overnight they favoured another 75-basis-point hike calmed nerves, as aggressive policy tightening by major central banks have left investors worried about a possible recession.

Investors now look to the ECB meeting next week, where a 25 basis point hike, its first in over a decade, has been signalled. The ECB has lagged most peers in rate hikes, but with inflation touching record highs and expected to be exacerbated by an energy dispute with Russia, markets look for hints on the magnitude of future hikes.

Italy's FTMIB stabilized 0.1%, after plunging 3.4% to its lowest since November 2020 on Thursday, when Prime Minister Mario Draghi resigned after coalition party 5-Star Movement failed to back him in a confidence vote over his plan to combat soaring prices.

President Sergio Mattarella urged him to rethink, and Draghi is expected to appear in parliament next Wednesday.

Some downbeat earnings weighed on the STOXX 600, with luxury goods group Richemont, miner Rio Tinto, Dutch navigation TomTom and Swedish bank Handelsbanken sliding between 2% and 3.7%.

Meanwhile, healthcare and technology stocks were among the biggest boosts to the STOXX 600. (Reporting by Susan Mathew in Bengaluru; Editing by Rashmi Aich)