European stocks inched higher in early trade on Wednesday, led by banks such as HSBC (HSBA.L) and UBS (UBSN.VX) ahead of the U.S. Federal Reserve's rate decision. At 0708 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.06 percent at 1,004.99 points. "There is no clear trend at the moment, no big buy or sell signals," said Jacques Henry, analyst at Louis Capital Markets, in Paris. "Valuations are now back at 2007 levels. Last year's slump was excessive, but this has now been fully corrected, and at this point, it's hard to see a catalyst that could keep the rally going." Banks inched higher, with HSBC up 0.5 percent, UBS up 0.4 percent, Credit Suisse (CSGN.VX) up 1 percent, and Societe Generale (SOGN.PA) up 0.9 percent. Food companies were on the downside, with Nestle (NESN.VX) losing 0.9 percent and Danone (DANO.PA) dropping 0.7 percent. Economists forecast the policy-setting Federal Open Market Committee to hold its target range for overnight interest rates steady at zero to 0.25 percent until at least 2010. A statement outlining the Fed's policy decision was expected after European market close, at around 1815 GMT. (Reporting by Blaise Robinson)

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