European shares at 6-wk highs as ECB cheers the banks

Last Updated: Thu, Jul 18, 2013 15:40 hrs

LONDON, July 18 (Reuters) - European shares scaled six-week highs on Thursday, with banks rallying after the European Central Bank eased collateral rules, and with strong sales boosting the media and luxury sectors.

Banks were the top performing sector, up 2.2 percent after the ECB expanded the list of eligible collateral to include more asset-backed securities (ABS), boosting sentiment on French, Spanish and Italian lenders.

"I don't know if they will really lend more but it has an impact on the equity market," said Vincent Guenzi, chief strategist at Cholet Dupont.

"We were missing a catalyst and this could be a good catalyst to move the market and especially the banking sector," he added, forecasting that the Euro STOXX 50 could gain another 4 percent to 5 percent by the autumn.

The euro zone blue-chip index provisionally closed up 1.2 percent at 2,713.25 points, while the pan-European FTSEurofirst 300 added 0.8 percent to 1,208.25 points. Both posted their highest finish since early June.

Other top gainers included advertiser Publicis and luxury goods group Hermes, who both said a strong performance in the North American region had helped boost sales.

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