European shares set for biggest weekly fall since mid-June

By Kit Rees

LONDON (Reuters) - European markets fell on Friday putting the STOXX 600 on track to post its biggest weekly loss since the middle of June with all major sectors in the red on the day.

The STOXX 600 index fell 0.7, retreating from a 7-week high reached earlier in the week. Volumes remained light, characteristic of the summer trading period.

European markets eased after comments from leading U.S. Federal Reserve policymakers indicating support for a U.S. interest rate hike in the near term, at odds with Wednesday's dovish minutes.

"Markets have been pricing in a little bit too dovish an outlook," Augustin Eden, research analyst at Accendo Markets, said, adding that the possibility of a rate hike was weighing on markets.

The STOXX 600 remains down 6.9 percent this year, and is still slightly below its pre-Brexit level.

Vopak, the world's largest independent storage tank operator, was the top faller, dropping 6.6 percent after it reported first half results hit by impairment charges.

German retailer Metro was down 2.7 percent after Bernstein cut their rating on the stock to "underperform", citing weak margin progression and a likely capital increase into the demerger of some of its business units.

"Metro performed well ... since the announcement of the demerger. Enthusiasm has been running too far," analysts at Bernstein said in a note.

William Hill, however, rose nearly 3 percent after Rank Group and 888's bid for the bookmaker broke down.

"We never felt that the now failed merger bid delivered either value for WMH shareholders or indeed clear commercial logic," analysts at Liberum said in a note.

Also among the top gainers, easyJet rose 3.2 percent on the back of a press report of takeover interest.

Sweden's Nibe jumped 3.5 percent after reporting a pretax profit just above forecast.

So far, 53 percent of companies in the STOXX 600 index have reported earnings exceeding analyst estimates, according to Thomson Reuters data. Overall, second quarter earnings are expected to decline 7.7 percent from Q2 2015.

(Reporting by Kit Rees; editing by Vikram Subhedar/Mark Heinrich)