European shares edged higher in early trading on Wednesday on hopes that France's Christine Lagarde, who was named the new head of the European Central Bank, will continue with the dovish policy stance of current chief Mario Draghi. If approved by the European parliament, Lagarde will succeed Draghi when his term expires at the end of October.

Government bond yields in much of the euro zone fell to fresh record lows on the news and bank stocks, which tend to suffer from a low interest rate environment, fell 0.5 per cent.

The pan-European STOXX 600 index gained 0.2 per cent by 0706 GMT, with the food & beverages sector outperforming with a 0.9 per cent rise.

German consumer goods company Henkel rose 1.5 per cent after Goldman Sachs upgraded the stock to "buy" from "neutral" as the brokerage expects the company's recovery in the second half of the year to drive future growth.

European chipmakers took a hit after a senior US official told the Commerce Department's enforcement staff this week that China's Huawei should still be treated as blacklisted.

The news comes as a stark difference from US President Donald Trump decision over the weekend to ease a ban on sales to the Chinese firm.

STMicroelectronics, STMicroelectronics and Infineon fell between 1 per cent and 2 per cent.