European shares gain, Ryanair tumbles on profit warning

LONDON, Nov 4 (Reuters) - European shares rose on Monday, with sentiment buoyed by increased expectations the European Central Bank will strike an equities-friendly dovish tone at a policy meeting this week.

That follows a surprise drop in euro zone inflation to 0.7 percent in the year to October, well below the ECB's target of just under 2 percent. Both UBS and RBS expect a rate cut at Thursday's meeting.

The pan-European FTSEurofirst 300 index was 0.4 percent higher at 1,295.06 points to trade near last-week's 5-year high. The index is up about 14 percent so far this year.

Europe's largest airline, Ryanair, fell 9 percent after saying its annual profit was set to fall for the first time in five years as intense competition pushes average fares down by around 10 percent over the winter months.

Easyjet fell 5 percent.

According to Thomson Reuters StarMine, more than half of the STOXX Europe 600 companies have reported results so far, of which 47 percent have met or beaten expectations, against 58 percent in the full second quarter and 52 percent in the January-March period.