European shares set to end week higher after ECB's dovish hike

European shares extended their rally on Friday, on track to end their week higher, following a sharp jump in the previous session after the European Central Bank (ECB) signalled an end to its rate hike cycle. STOXX 600 rose 0.9%, supported by gains in China-exposed luxury stocks after better-than-expected economic data in the world's second-largest economy.

European shares extended their rally on Friday, on track to end their week higher, following a sharp jump in the previous session after the European Central Bank (ECB) signalled an end to its rate hike cycle.

STOXX 600 rose 0.9%, supported by gains in China-exposed luxury stocks after better-than-expected economic data in the world's second-largest economy. France's Kering and LVMH gained 2.7% each.

The pan-European STOXX 600 index notched its biggest percentage gain in six months on Thursday following the ECB's 25-basis point (bps) hike, its 10th and likely final hike in a 14-month-long fight against inflation. London's blue-chip FTSE 100 led weekly gains in the region, adding 0.8% on Friday.

Sweden's H&M shed 4.6% on reporting flat sales in its most recent quarter, lagging expectations as the fashion group struggles to attract customers while the cost-of-living crisis drags on.