European shares rise on smaller ECB rate hike, upbeat earnings

European shares rose on Friday as the European Central Bank's smaller rate hike as well as market-beating results from Adidas and Apple boost sentiment. The pan-European STOXX 600 index edged up 0.3% by 0715 GMT, but is on track for its second consecutive weekly loss.

European shares rose on Friday as the European Central Bank's smaller rate hike as well as market-beating results from Adidas and Apple boost sentiment.

The pan-European STOXX 600 index edged up 0.3% by 0715 GMT, but is on track for its second consecutive weekly loss. Bank and energy shares led the gains on the index, rising 1.2% and 1.8%, respectively, while miners slid 0.2%.

The ECB raised its benchmark rates by 25 basis points—the smallest increase in its rate-hike cycle that started last summer—lifting the benchmark for borrowing costs to 3.25%. It, however, signalled more tightening was to come. Economic data, including the euro zone's retail sales for March and composite PMI for April, will be on investors' radar for more clues on the region's economic strength.

Adidas AG climbed 5.2% after reporting better-than-expected first-quarter results, with investors hoping the German sportswear giant can turn its fortunes around. In the U.S., Apple Inc, the world's largest company by market capitalisation, surprised investors with a rise in iPhone sales even as the global smartphone market slumps.