Jan 19 (Reuters) - European shares opened higher on Friday, boosted by gains in financials, although the benchmark index was on course for a weekly decline after investors tempered their rate-cut expectations on policymakers' hawkish remarks.

The pan-European STOXX 600 index was up 0.4%, as of 0818 GMT, extending gains from the previous session.

Most major sector indexes traded in the black, with euro zone banks adding 0.6%, propped up by a nearly 3% jump in KBC Group after Morgan Stanley raised the Belgian integrated bank-insurance group's rating to "overweight" from "equal-weight".

Still, hawkish remarks from European Central Bank policymakers prompted traders to scale back their bets of a rate cut, putting the benchmark index on course for a weekly loss.

On the data front, German producer prices fell more than expected in December, decreasing 8.6% year-on-year, although the blue-chip DAX 40 index was up 0.4%.

Among other major movers, Teleperformance gained 4.7% after Stifel upgraded the teleservices firm's rating to "buy" from "hold".

(Reporting by Shristi Achar A in Bengaluru; Editing by Sherry Jacob-Phillips)