Europe midday: Stocks hold onto gains ahead of Fed

European stocks were holding higher, with investors apparently recovering their calm following Monday's sharp drop in technology stocks and ahead of the US central bank's policy announcement due the next day.

Investors were looking out to the US Federal Reserve's policy announcement on Wednesday, with rate-setters in Washington DC widely expected to hike their main policy rate by 25 basis points to a range of between 1.0% and 1.25%. Nevertheless, question remarks remained regarding the prospect for more tightening further out.

"There is an element of caution in the markets ahead of tomorrow’s Federal Reserve meeting, with a rate hike now almost fully priced in and traders keen to find out what the path of rate hikes will be going forward. Policy makers had previously alluded to another hike this year but markets remain unconvinced given the data we’ve seen, particularly on inflation which has actually been trending lower in recent months and remains below target," said Craig Erlam, senior market analyst at Oanda.

As of 1215 BST, the benchmark Stoxx 600 was higher by 0.53% to 388.68, alongside a rise of 0.47% to 12,749.55 for Germany's Dax and a gain of 0.37% to 5,260.05 in Paris's Cac-40.

Within the pan-European Stoxx, the Technology sub-index was up by 1.24% to 427.13.

Calm continued to prevail in the other main asset classes, with front month Brent crude oil futures edging higher by 0.23% to $48.40 a barrel on the ICE, while the euro was up by 0.04% on the US dollar to 1.1212.

In political news, in an interview with the FT Europe's lead Brexit negotiator Michel Barnier warned the UK not to "waste" more time.

On a more conciliatory note, German finance minister Wolfgang Schaeuble told Bloomberg the UK would be welcome back in the EU should it decide to stay.

Economic sentiment in Germany dipped a tad in June, with the ZEW institute's gauge slipping from a reading of 20.6 to 18.6 for May (consensus: 21.5).

June's reading was "consistent" with broadly steady annual German GDP growth around the 1.7% level seen over the first three months of 2017.

As expected, Spain's national statistics office confirmed a preliminary estimate that consumer prices in the Mediterranean country were unchanged last month, having risen by 2.0% year-on-year during the previous month.

French non-farm payrolls grew by 0.4% or 89,700 quarter-on-quarter during the first three months of 2017, according to INSEE.

Meanwhile, Germany's Fraport indicated that airport passenger numbers grew by 5.7% year-on-year in May, as cargo increased 5.1%.

In parallel, Air France reported a 6.1% increase in its May traffic.

France's Engie announced its intention to sell its 10% stake in India's Petronet LNG for a value of €410.0m.