European markets trade higher on hopes for Russia-Ukraine cease-fire; Fed decision ahead

LONDON — European stocks were trading higher on Wednesday afternoon amid renewed optimism of progress in talks between Russia and Ukraine, and as global markets await the latest monetary policy figures and economic forecasts from the U.S. Federal Reserve.

The pan-European Stoxx 600 index was trading 3.2% higher Wednesday afternoon, with all sectors in positive territory expect for oil and gas.

Regional markets got a boost on reports that progress was being made in ongoing talks between Russia and Ukraine in a bid to find a peace deal. Russia's Foreign Minister Sergey Lavrov said Wednesday that some parts of an agreement were close to being agreed, with "neutral" status for Kyiv was being "seriously discussed," he told RBC News this morning.

Shares of BMW were up 4.6% on Germany's DAX index despite the German auto giant warning that it can't give accurate guidance amid the geopolitical uncertainty in Europe, and that production interruptions should continue to be expected in light of Russia's war on Ukraine. CEO Oliver Zipse told CNBC on Wednesday that the fallout from supply bottlenecks is improving, however.

Shares of clothing giant Inditex were trading 0.1% higher after the Spanish company reported a sharp rise in 2021 revenues and said that store and online sales between Feb. 1 and March 13 are tracking 33% higher year on year.

Russia's invasion of Ukraine continues to dominate global attention. The Russian state is due to pay $117 million in interest on two sovereign eurobonds on Wednesday, the first of four payment dates to creditors in March alone as the country faces the prospect of defaulting on its debt.

That comes after international sanctions on Russia's central bank have blocked off a substantial portion of the country's foreign exchange reserves following Russia's invasion of Ukraine.

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— CNBC's Samantha Subin and Eustance Huang contributed to this market report.