Updates with afternoon trading

By Avinash P, Johann M Cherian and Niket Nishant

April 2 (Reuters) - Europe's main stock index trimmed losses on renewed hopes of a reopening of the crucial Strait of Hormuz, even as U.S. President Donald Trump's promise to keep striking Iran kept sentiment in check.

The pan-European STOXX 600 index .STOXX dipped 0.2% to 596.63 points on Thursday, after falling as much as 1.6% earlier in the session.

Volumes were also low as European markets headed into a long holiday weekend. Norway and Denmark markets were closed on account of the Maundy Thursday holiday, while all major indexes will be closed for Good Friday on April 3 and Easter Monday on April 6.

Iran was drafting a protocol with Oman to monitor traffic in the Strait of Hormuz, its foreign ministry said.

A potential reopening of the strait would resume shipping through the crucial waterway and help restore oil flows, easing inflation concerns.

Still, investors remained on edge after Trump vowed to hit Iran "extremely hard over the next two to three weeks."

"We've said all along that the economic impact of this crisis depends not just on how high energy prices rise, but how long they stay elevated," ING economists wrote.

TECH, MINERS FALL

European technology stocks .SX8P slid 1%, while miners .SXPP fell 0.9%. Banks .SX7P fell 1.1% and were among the major laggards on the index.

"For the first couple of weeks since the attacks, the market was very worried about inflation," said Marija Veitmane, head of equity research at State Street.

"Now we begin to worry about growth outcomes... and that pressures equity multiples."

This week's whipsaw in markets also reflects the volatility investors have had to navigate for more than a month. The STOXX volatility index .V2TX added 1.5 points to 28.5.

"What began as a sharp shock to global energy markets is evolving into a more complex phase marked by shifting dynamics, heightened uncertainty, and increasing risks of escalation," Julius Baer analysts wrote.

Investors are still pricing in three 25-basis-point interest rate hikes by the end of this year, according to LSEG-compiled data. They had expected no change to monetary policy by the European Central Bank before the war.

Among individual movers, Stellantis STLAM.MI added 4.1% after Bloomberg News reported that the carmaker was discussing options for building electric vehicles in Canada with Chinese partner Zhejiang Leapmotor Technology 9863.HK.