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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 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

and France's both up 0.5%.

London's FTSE 100 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 up 0.8%.

Among individual stocks, Germany's Puma gained 1.9%,

after U.S. peer Urban Outfitters ( URBN ) reported third-quarter

revenue above estimates.