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London - 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% after the ECB expanded the list of eligible collateral to include more asset-backed securities (ABS), boosting sentiment on French, Spanish and Italian lenders.
Some of the biggest moves were seen in the smaller names, such as Spain's Bankinter, which rallied 8.5%.
The blue chips also benefited, with Italy's Unicredit up 4.3%, while France's Credit Agricole gained 5.3%, though analysts downplayed the long-term impact on their finances or the economy.
"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% to 5% by the autumn.
The euro zone blue-chip index rose 1.4% to 2 717.99 points, breaking above technical resistance around the 50- and 60-day moving averages to post its highest finish since June 10.
The pan-European FTSEurofirst 300 added 0.9% to 1 209.12 points, with sentiment also lifted by record highs on Wall Street.
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.
Fresh signs of improving outlook in the United States - with a bigger than forecast fall in weekly jobless claims and an improvement in regional business sentiment - backed expectations that the world's biggest economy will remain a key earnings driver for European corporates.
"The US is a pillar of strength, at least on a relative basis, across sectors. Europe is living up to expectations," said Ian Richards, strategist at Exane BNP Paribas.
"The disappointments, such as they are, are clearly coming from emerging markets and particularly China, where there is a lack of visibility. Whilst people were relatively cautious coming into this season, I still think there is downside being realised against those expectations on release."
Indeed, a weak performance in China prompted Dutch paints and chemicals firm AkzoNobel to forecast flat or lower operating profit this year, sending its shares down 8.0%.
