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STOXX 600 set to log best week in over a month

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Spain's inflation eases to 1.7%

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Moncler surges after CEO strikes investment deal with LVMH

(Updated at 0810 GMT)

By Pranav Kashyap

Sept 27 (Reuters) - European shares retreated from

record highs touched earlier on Friday, as caution prevailed

ahead of a crucial U.S. data, although gains in Moncler and

luxury stocks capped further downside in prices.

The pan-European STOXX 600 index held its ground at

526.32 points. The benchmark index hit an all-time high of

526.72 points earlier in the session, and is set to log its best

week in more than a month, if gains hold.

Investors might be questioning is there enough momentum to

go higher after touching those record highs, said Daniela

Hathorn, senior market analyst at Capital.com.

"We may see a bit of consolidation from here".

Overall gains were muted due to investor caution as markets

awaited the U.S. core personal consumption expenditures (PCE)

price index - the Fed's preferred measure of inflation - due

later in the day.

Shares of Italy's Moncler surged 11.8% after CEO

Ruffini struck a deal with LVMH, which will see the

retailer partner with Ruffini to make an expanded investment in

the luxury group.

The region's personal & household goods sector

supported the index with a 1.6% jump.

News of China's stimulus significantly boosted the STOXX 600

benchmark index this week, underscoring the crucial role of

Chinese consumers for European companies.

Earlier in the day, China's central bank cut the borrowing

cost of its seven-day reverse repurchase agreements, as part of

the biggest stimulus package since the pandemic.

China-focused luxury stocks climbed higher, with

shares of LVMH, Hermes, Kering,

Hugo Boss and Burberry ( BBRYF ) gaining between 2%

and 4%.

Gains in automobile stocks provided support, as

European luxury carmakers with significant exposure to the

Chinese market tend to benefit from higher consumer spending due

to the stimulus.

"China had been shoved to second base ... This (rally) puts

into perspective how much Chinese consumers matter for Europe,"

Hathorn said.

Chinese stocks are headed for the best week since 2008.

French consumer prices rose less than anticipated in

September, according to CPI figures. The CAC 40 Index

was up 0.1%.

Spain's IBEX 35 was trading flat after data

signalled the country's inflation eased to 1.7%.

German unemployment rose more than expected in September,

according to data. Still, the DAX index was trading up

0.2% at 19,292.20.

Investors are also on the lookout for the euro zone's

consumer confidence figures, due at 0900 GMT. European Central

Bank's chief economist Philip Lane will be speaking on fiscal

policy at 0815 GMT.