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* STOXX 600 set for fourth straight weekly rise
* Banks push euro zone stocks index higher
* Trade tensions ease, concerns over growth linger
* Deutsche Bank gains after U.S. settlement
(Adds comments, updates price)
By Sagarika Jaisinghani and Susan Mathew
Sept 13 (Reuters) - European shares ground out gains for the
fourth day running on Friday as signs of progress in U.S.-China
trade talks propped up shares after a mixed response to stimulus
from the European Central Bank a day earlier.
ECB chief Mario Draghi told governments to do more to revive
an ailing euro zone economy as he cut rates deeper into negative
territory and pledged indefinite monetary stimulus, tying the
hands of his successor for years to come and initially driving
stock markets higher.
Bank stocks, which wavered after the decision, rose
on Friday, with analysts citing the ECB's easing of the terms of
its long term loans to banks and the introduction of a tiered
deposit rate as offsetting the pain of negative rates.
"By exempting a significant chunk of bank deposits from the
negative deposit rate and making its offer of long-term
liquidity for banks even more generous, the ECB is mitigating
the impact of a negative deposit rate on bank balance sheets,"
said Florian Hense, an economist at Berenberg.
"By lowering funding costs further, it can make it easier
for governments to finance a modest fiscal expansion and nudge
countries with some extra fiscal space to actually use it –
think Germany."
Both the pan-European STOXX 600 index and the euro
zone only index were higher after an hour's trade, but
the gains were muted and suggested investors may have had their
fill after four weeks of gains that have indexes back near
levels last seen in July.
Concerns linger about the extent to which the central bank's
stimulus can boost economic growth or stop the euro zone's
biggest economy from slipping into recession. The Ifo institute
cut its 2019 growth forecast for Germany on Thursday, predicting
a recession in the third quarter.
"On balance, this round of ECB policy easing is seen as
generally growth-supportive at the margin, but may not
significantly move the growth dial," said Selena Ling, Head of
Strategy and Research at OCBC.
Trade-reliant commodity-linked and automotive
stocks were boosted by fresh indications that a
prolonged trade war between the United States and China was
thawing.
After Beijing and Washington made tariff concessions to each
other, U.S. President Donald Trump said he could consider an
interim trade deal with China ahead of high-level negotiations
in October.
The food & beverage index was the biggest decliner
on the STOXX 600 as investors continued to rotate out of
defensive stocks.
Roche Holding was the biggest boost to the index as
it reported positive data from a primary progressive MS (PPMS)
study.
French conglomerate Bollore Group was also among
the best performers after posting a 27% increase in first-half
core earnings.
Deutsche Bank AG rose 1.6% after becoming the
first of 16 financial services companies to resolve claims that
it conspired to rig prices of bonds issued by Fannie Mae
and Freddie Mac.
(Reporting by Sagarika Jaisinghani in Bengaluru; editing by
Patrick Graham)
