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Nov 2 Reuters European shares climbed over 1 on Thursday, led by ratesensitive real estate and technology stocks, as investors bet on the possibility of an end to the U.S. monetary policy tightening after the Federal Reserve held interest rates steady.

The panEuropean STOXX 600 index gained 1.6 at 0930 GMT, touching a fresh twoweek high.

Fed Chair Jerome Powell maintained the option of another hike if progress on inflation stalls, but said that a rise in marketbased interest rates may begin to weigh on the economy.

Powell acknowledged that a rise in longterm yields have tightened financial conditions… our read of the press conference is that it supports our view that the Fed is done with hikes, said Mohit Kumar, chief economist Europe at Jefferies.

Euro zone government bond yields dropped tracking their U.S. peers, with Germany39;s twoyear yield sliding to a twomonth low, driving a 4.9 surge in the bond proxy realestate sector to a threeweek high.

The technology sector also rose 3.2 to a threeweek high.

Focus now switches to the Bank of England39;s policy decision later in the day, widely expected to keep rates unchanged.

Investors also took stock of data showing euro zone manufacturing activity took a further step back last month in a…