July 20, 2017 / 8:55 AM / a year ago

European shares ride global equity wave, ECB policy meeting eyed

* STOXX 600 up 0.3 pct

* Banking sector awaits ECB to hint on policy shift

* Nordea falls after Q2 undershoots expectations

* EasyJet, Lufthansa lead travel and leisure sector down

By Julien Ponthus and Helen Reid

LONDON, July 20 (Reuters) - European shares extended their gains in early deals on Thursday, lifted by buoyant global markets, hours ahead of European Central Bank meeting that investors expect will lay the groundwork for an autumn policy shift.

The pan-European STOXX 600 rose 0.3 percent after major U.S. and Asian stock indexes closed at record highs, helped notably by technology stocks which finally surpassed their dotcom bubble peaks.

The sector continued to shine in Europe with a 0.6 percent rise following its best daily performance since September during Wednesday’s session.

SAP, Europe’s most valuable technology firm, reversed early gains to fall 0.2 percent after reporting revenues for the second quarter rose 10.4 percent to 5.78 billion euros, slightly above analysts’ expectations.

The European banking sector retreated by 0.3 pct ahead of the ECB’s policy meeting, at which light could be shed on how it intends to progressively exit its stimulus package.

Nordea, the Nordic region’s biggest bank by market value, reported second-quarter operating earnings below analyst estimates and dropped 5.6 percent. In the same region, Danske Bank retreated 1.7 percent after posting its quarterly earnings.

Although few expect a clear statement on policy change, investors were eager for any hints as to how and when the European central bank intends to progressively put an end to its massive asset purchases.

“We think that (...) the ECB is now focused on carefully preparing the markets for a tapering decision on 7 September,” UBS analysts said in a research note.

Britta Weidenbach, head of European equities at Deutsche Asset Management said : “As long as these developments on the interest rate front go along with a very good economic backdrop, that should not be a problem for equity markets — rather the opposite, it should be positive.”

With a 2.4 percent jump, France’s Publicis, was the best performer in the media sector after the advertising group announced underlying sales grew by 0.8 percent in the second-quarter.

Anglo-Dutch conglomerate Unilever, whose products range from Hellmann’s mayonnaise to Dove soap, edged 0.6 percent higher after reporting slightly weaker than expected quarterly sales but reaffirmed it was sticking to its full-year target.

Among stocks trading in negative territory was Swiss engineering company ABB, which was down 2.6 percent after a weaker-than-expected increase in quarterly net profit.

British budget airline easyJet along with Germany’s Lufthansa led the travel and leisure sector down with a 4.1 percent fall.

Reporting by Julien Ponthus; Editing by Catherine Evans

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