European shares extend gains as oil retreats; Fed decision in focus

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March 18 (Reuters) - European shares extended their rebound on Wednesday as retreating crude prices boosted sentiment, while investors also awaited an interest rate decision from the U.S. Federal Reserve.

The pan-European benchmark STOXX 600 was up 0.5% to 605.59 points by 0810 GMT. The index gained for a third straight session, its longest such streak in a month.

Global markets rallied as oil prices paused gains, even as hostilities intensified between Israel and Iran following the killing of Tehran's security chief.

Energy sector edged 0.3% lower, on track to snap an eight-day winning streak on crude's pullback, while financial stocks provided the biggest boost to the benchmark.

Among individual movers, Diploma jumped 14.5% after the technical products and services distributor raised its fiscal year 2026 guidance.

Bollore jumped 15.7% after the company proposed an exceptional dividend of 1.5 euros per share.

On the macro front, the euro zone's final reading for February consumer prices was due later in the day.

Investors will now closely parse the Fed's outlook for new policy decisions post the outbreak of the Middle East conflict.

(Reporting by Avinash P in Bengaluru; Editing by Janane Venkatraman)