May 3 - European shares rose on Wednesday as investors turn optimistic that U.S. Federal Reserve may signal a pause in its 14-month tightening cycle after raising interest rates for the last time later in the day.

The pan-European STOXX 600 index (.STOXX) inched up 0.2% by 0715 GMT, after a sharp selloff in the previous session.

Oil and gas shares (.SXEP) were the top gainers on the index, rising 0.6%, recovering some of its losses from Tuesday.

Automobile shares (.SXAP) were in the red, falling 0.8%.

Investors anticipate that the Fed will follow through with a quarter percentage point hike at the end of its latest two-day policy meeting. The statement is due to be released at 2 p.m. ET (1800 GMT), with Chair Jerome Powell scheduled to speak to reporters half an hour later.

Data on Tuesday showed banks are sharply turning off the credit taps, making a case for a smaller hike by the European Central Bank on Thursday.

Shares in Italy's UniCredit (CRDI.MI) jumped 5% as the lender raised its financial targets for the year after it posted stronger-than-expected first-quarter earnings

Signify (LIGHT.AS), the world's biggest lighting maker, fell 7.0% on missing first-quarter core profit expectations.