ECB39;s Villeroy loose budgets could fuel more inflation
HM39;s quarterly sales lag expectations, shares fall
Luxury stocks rally on encouraging Chinese macro data
STOXX 600 rises 0.9, up 2.1 so far this week

Sept 15 Reuters European shares extended their rally on Friday, on track to end the week higher, following a sharp jump in the previous session after the European Central Bank ECB signalled an end to its rate hike cycle.

The STOXX 600 rose 0.9, supported by gains in Chinaexposed luxury stocks after betterthanexpected economic data in the world39;s secondlargest economy.

The index is up 2.1 so far this week.

Parislisted Kering and LVMH climbed 2.7 and 3.2, respectively.

The panEuropean STOXX 600 index notched its biggest percentage gain in six months on Thursday following the ECB39;s 25 basis point bps hike, its 10th and likely final hike in a 14monthlong fight against inflation.

We continue to see no cuts before September 2024 implying a 12month pause at 4.00 and believe rates are still unlikely to fall back below neutral in 2025 given our ongoing concern about persistent inflation in the medium term, said economists at Deutsche Bank in a note.

Overly loose budget policies risk fuelling inflation at a time when the central bank is fighting to bring it lower, said ECB policymaker Francois Villeroy de Galhau.

Investors are now focused on central bank meetings next week, with the U.S. Federal Reserve and Bank of England set to announce their rate…