June 15, 2018 / 7:37 AM / in 4 months

Dovish ECB sets European shares up for best week since early March

MILAN, June 15 (Reuters) - European shares were set for their best week in more than three months on Friday as investors pushed back expectations for a rate hike after Thursday’s European Central Bank policy meeting.

The pan-European STOXX 600 index rose 0.2 percent by 0710 GMT, up 2.2 percent on the week, as further falls in the euro pushed the euro zone index up 0.2 percent to a three-week high.

“The euro is getting crushed after Draghi’s performance yesterday and the ECB’s dovish wind down of QE,” said Neil Wilson, chief market analyst at Markets.com in London.

The ECB said on Thursday it would end its hallmark bond purchase scheme by the close of the year but signalled that any interest rate hike is still distant.

The export-oriented autos sector, which tends to benefit from a lower euro, rose 0.9 percent in early trading, leading gainers in Europe, while banks, whose lending business margins have been squeezed by record low interest rates, led the fallers, down 0.6 percent.

Among single stocks, Tesco rose 2.1 percent.

Britain’s largest retailer said a drive to lower prices for customers had boosted its quarterly sales, in an ominous warning for rivals three years after the firm embarked on a turnaround programme.

Rolls Royce rocketed 13 percent after the engine maker said it was sticking to its 2018 guidance and announced new ambitious mid-term financial targets.

Specialty pharmaceuticals company Indivior sank 15 percent, leading losers on the STOXX. (Reporting by Danilo Masoni, Editing by Helen Reid)

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