(ADVISORY- Reuters plans to replace intra-day European and UK stock 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 more details) Adds details, updates prices)
* Pan-European STOXX 600 index flat
* ECB to keep rates on hold, expected to lift inflation target
* Voestalpine, Johnson Matthey rise after results
* Munich Re weighed down by price target cuts
By Danilo Masoni
MILAN, June 2 (Reuters) - European shares steadied on Thursday, with investors avoiding taking large positions ahead of the European Central Bank's (ECB) policy meeting later in the day, while Voestalpine was boosted by well-received results.
While keeping interest rates firmly on hold, the ECB is expected to raise growth and inflation forecasts, a rare positive step even as it emphasises persistent negative risks and a readiness to provide more stimulus.
However some investors expect some volatility when the central bank's chief Mario Draghi speaks after the policy announcement.
"Draghi faces the hard task of avoiding that satisfaction for this welcome development (higher inflation target) does not translate into a signal that the governing council has lowered the 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 Austrian steel producer posted a full-year net profit above expectations, helped by its focus on better-quality steel and products which made it less vulnerable to price swings and to competition from commodity steel imports.
"Voestalpine showed that even in very difficult times, they are able to invest into quality growth, financed by its operating cash flow," analysts at Baader Helvea said in a note.
A welcome set of results also underpinned shares in Johnson Matthey which rose around 1 percent.
The British maker of metal catalysts for car emission-control devices also forecast higher results in the coming year after restructuring and due to improved market conditions.
Munich Re fell 2.5 percent, weighed down by some price target cuts today that followed yesterday's news of a deep restructuring at its loss making insurance business Ergo.
JP Morgan cut its price target on the stock 190 euros from 200 euros saying the ERGO restructuring added less value than expected but left the company's capital strength unchanged.
UK housebuilder Taylor Wimpey fell 4.5 percent, the biggest loser on the FTSEurofirst, as the stock went ex dividend.
Today's European research round-up
ADVISORY- Reuters plans to replace intra-day European and UK stock 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 format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.
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Mike Dolan, Markets Editor EMEA (Reporting by Danilo Masoni; Editing by Sudip Kar-Gupta and Jon Boyle)