European shares headed for weekly gains after ECB rate cut

(Reuters) – European shares opened muted on Friday, after the European Central Bank’s latest rate cut and upbeat earnings prompted strong gains in the previous session, with the main stocks gauge headed for a second weekly rise.

The Europe-wide STOXX 600 index was down 0.05% at 0718 GMT, with real estate firms leading losses down 0.6%, while basic resources and autos helped to keep it afloat.

The ECB trimmed its interest rates on Thursday to 3.25%, and while President Christine Lagarde did not provide hints on future moves, four sources close to the matter told Reuters a fourth cut in December is likely unless key data turns south in the coming weeks.

In single stocks, Swedish truck maker Volvo (OTC:VLVLY)’s shares fell 3% after the company reported a bigger-than-expected drop in its third-quarter adjusted operating profit and said it expects roughly unchanged demand next year.

British American Tobacco (NYSE:BTI) said it is close to settling its Canadian tobacco litigation, sending shares down 2%.

Switzerland’s Avolta and Barry Callebaut were up between 2% and 3% after receiving upgrades from Deutsche Bank and Morgan Stanley, respectively.