(ADVISORY- Reuters plans to replace intra-day European and UKstock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for moredetails) Adds details, updates prices)
* Pan-European STOXX 600 index flat
* ECB to keep rates on hold, expected to lift inflationtarget
* Voestalpine, Johnson Matthey rise after results
* Munich Re weighed down by price target cuts
By Danilo Masoni
MILAN, June 2 (Reuters) - European shares steadied onThursday, with investors avoiding taking large positions aheadof the European Central Bank's (ECB) policy meeting later in theday, while Voestalpine was boosted by well-received results.
While keeping interest rates firmly on hold, the ECB isexpected to raise growth and inflation forecasts, a rarepositive step even as it emphasises persistent negative risksand a readiness to provide more stimulus.
However some investors expect some volatility when thecentral bank's chief Mario Draghi speaks after the policyannouncement.
"Draghi faces the hard task of avoiding that satisfactionfor this welcome development (higher inflation target) does nottranslate into a signal that the governing council has loweredthe guard against the risk of deflation," said Giuseppe Sersale,fund manager at Anthilia Capital.
The pan-European STOXX 600 and FTSEurofirst 300 indexes were flat in percentage terms by 0823 GMT,having both fallen around 1 percent in the previous session.
Voestalpine rose more than 6 percent. The Austriansteel producer posted a full-year net profit above expectations,helped by its focus on better-quality steel and products whichmade it less vulnerable to price swings and to competition fromcommodity steel imports.
"Voestalpine showed that even in very difficult times, theyare able to invest into quality growth, financed by itsoperating cash flow," analysts at Baader Helvea said in a note.
A welcome set of results also underpinned shares in JohnsonMatthey which rose around 1 percent.
The British maker of metal catalysts for caremission-control devices also forecast higher results in thecoming year after restructuring and due to improved marketconditions.
Munich Re fell 2.5 percent, weighed down by someprice target cuts today that followed yesterday's news of a deeprestructuring at its loss making insurance business Ergo.
JP Morgan cut its price target on the stock 190 euros from200 euros saying the ERGO restructuring added less value thanexpected but left the company's capital strength unchanged.
UK housebuilder Taylor Wimpey fell 4.5 percent, thebiggest loser on the FTSEurofirst, as the stock went exdividend.
Today's European research round-up
ADVISORY- Reuters plans to replace intra-day European and UKstock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia formatfrom 0600 London time through the 1630 closing bell, it willinclude the best of our market reporting, Stocks Buzz service,Eikon graphics, Reuters pictures, eye-catching research andmarket zeitgeist. Breaking news and dramatic market moves willcontinue to be alerted to all clients and we will continue toprovide a short opening story and comprehensive closing reports.
If you have any thoughts, suggestions or feedback on this,please email mike.dolan@thomsonreuters.com.
Mike Dolan, Markets Editor EMEA (Reporting by Danilo Masoni; Editing by Sudip Kar-Gupta and JonBoyle)
