European shares edge up as auto, chemical stocks rise; Mideast talks eyed

May 27 (Reuters) – Europe’s benchmark STOXX 600 index edged higher on Wednesday and was just a hand’s reach ​away from an all-time high as ‌auto and chemical stocks gained, while investors kept a wary eye on escalating tensions in the Middle East.

The pan-European STOXX 600 index edged ‌up ​0.2% to 629.44 points ⁠by 0713 GMT, ⁠bringing it about 1% away from a record high hit in February before the conflict started.

Automobiles and parts led gains ​with a 1.5% advance, with Volvo Cars jumping 8% after the company ⁠said it received a ⁠U.S. government approval that would ​allow it to continue selling vehicles.

Chemical stocks also ​gained over 1% as AkzoNobel shot ‌up 16.6% after the paint maker rejected a joint cash takeover offer of €73 ($85) per share from rivals Nippon Paint <4612.T> and ⁠Sherwin-Williams .

Keeping gains in check were escalating tensions in the Middle East as Iran called recent U.S. ⁠strikes ‌a violation of the fragile ⁠ceasefire holding since April, while ​Israel ‌bombed Lebanon in its heaviest strikes ​in ⁠weeks.

Brent crude prices were marginally lower, but at $98 a barrel they kept inflation worries at the top of investor minds.

(Reporting by Johann M Cherian in Bengaluru; Editing by ​Mrigank Dhaniwala)