European shares rise as ECB rate decision looms

European shares opened higher on Monday, tracking gains in Asian equities, while investors braced for a key interest rate decision from the European Central Bank later in the week, Reuters reported.

The pan-European STOXX 600 was up 0.5 per cent by 0728 GMT, extending gains for the third straight session.

The sentiment was upbeat as China’s factory activity grew at the fastest pace in about two years in May, while a softer US inflation print on Friday continued to spur hopes of interest rate cuts this year by the Federal Reserve.

All eyes will now remain focused on the ECB’s interest rate decision on Thursday, where the central bank is expected to cut borrowing costs by 25 basis points from their record-high levels, according to a Reuters poll.

Most sectoral indices traded higher, with technology stocks among the top boosts, up nearly 1 per cent.

Among individual stocks, British drugmaker GSK tumbled 9.7 per cent after a Delaware judge allowed more than 70,000 lawsuits over the discontinued heartburn drug Zantac to go forward.