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 U.S. interest rate hikes.

The U.S. 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

"The Fed also saying we're not in recession yet is something that perhaps helped market outlook."

The pan-European STOXX 600 index rose 0.2%, 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%, 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 jumped 1.2% as upbeat results lifted carmaker Stellantis and chipmaker STMicroelectronics.

Luxury stocks got a boost from puffer jacket maker Moncler's sales beat. Moncler rose 5.1%, while Louis Vuitton owner LVMH gained 1.6%, providing the biggest boost to the STOXX 600.

Shell gained 0.8% after the oil major posted its biggest quarterly profit ever.

Europe's mining index jumped 3.2% to hit four-week highs as base metals and iron ore prices rose on Fed relief. This helped Anglo American rise 5.0% despite posting downbeat results.

Spain's IBEX slumped 1.4% as the euro zone's second-biggest lender, Santander, fell on missing profit estimates.

Planemaker Airbus and consumer company Nestle were among other heavyweights that fell after reporting their results. (Reporting by Susan Mathew in Bengaluru; Editing by Subhranshu Sahu)