European shares edged up on Wednesday on a boost from chemical manufacturers even though investors broadly stayed away from risky bets ahead of the Federal Reserve's much-anticipated interest rate decision and policy outlook.

The pan-European STOXX 600 rose 0.2% by 0915 GMT. Germany' benchmark DAX and France's CAC-40 were up 0.1% and 0.3%, respectively, after scaling intraday record highs on Tuesday.

"There's quite a lot of risk event going on with the ECB next and we are just seeing caution ahead of that," said Daniela Hathorn, senior market analyst at Capital.com.

Investors have fully priced in a pause from the Fed later in the day, with Tuesday's U.S. inflation data doing little to alter rate cut bets for next year.

The focus will be on Chair Jerome Powell's commentary and the central bank's short-term rates projection for clues on the timing of policy easing.

"Powell would want to avoid all this speculation about rate cuts and focus more on the evolution of the economy... he's going to refrain from sounding too happy with the progress so far," Capital.com's Hathorn added.

Policy decisions from the European Central Bank and the Bank of England on Thursday are next in line, with both expected to hold rates steady.

BASF jumped 3.7% after UBS upgraded the German chemicals giant's stock to "buy" from "sell", pushing the chemical sector to the top of the gainers' list, up 1.3%. France's Arkema rose 5.3%, helping the sector.

The healthcare sector also gained 0.7%, with Novo Nordisk bouncing back 1.1% after falling on Tuesday on rival Eli Lilly's read-across.

Zara owner Inditex climbed 1.6% to an all-time high, after the Spanish fashion retailer flagged strong trading into the key holiday season and raised its annual margin guidance.

Entain jumped 4.6% after the betting and gaming firm said CEO Jette Nygaard-Andersen was stepping down from the group with immediate effect.

Continental gained 3.7% after Bank of America Global Research upgraded the auto-parts maker to "buy" from "neutral".

On the flip side, energy stocks lagged, down 0.5%, tracking weak oil prices, while telecommunications lost 1%, set to extend declines from Tuesday, with Vodafone down 2.3%.

Nel dropped 10.9% to the bottom of STOXX 600 after the Norwegian hydrogen company said its client cancelled an order, which an analyst says reflects poor market conditions for the industry.

Storebrand shed 4.4% after the Norwegian insurer said it would be challenging to reach its 2023 profit ambition. (Reporting by Ankika Biswas in Bengaluru; Editing by Eileen Soreng and Nivedita Bhattacharjee)