Europe close: Investors brush off higher-than-expected CPI data

European shares were higher on Thursday as investors seemingly brushed off a higher than expected reading for consumer price inflation in the single currency area.

"The latest eurozone CPI report made for worrying reading today, as core inflation rose to a record high of 5.6% in February. Coming off the back of a rise in both French and Spanish CPI earlier in the week, todays eurozone figure provided markets with a reason to fear an end to the recent disinflation that has helped lift equity markets," said IG senior market analyst Josh Mahony.

"Interestingly, European markets have held up relatively well in the face of today’s data, although there is a greater degree of risk for bulls if we see a protracted period of flatlining or rising inflation data."

The pan-regional Stoxx 600 was up 0.51% to 460.02 with major regional bourses higher as well.

Germany's Dax edged up 0.15% to 15,327.64 while France's Cac-40 added 0.69% to 7,284.22.

Eurozone inflation eased less than expected in February, according to preliminary data released by Eurostat on Thursday.

Headline inflation in the bloc ticked down to 8.5% year-over-year in February from 8.6% in January. This was above consensus expectations for a decline to 8-8.5% from 8.6% in January, still significantly higher than the ECB’s 2% target.

Investors were nervous that persistent inflation might lead to more tightening of monetary policy. Data so far during the same week from Spain, France and Germany had shown no signs of easing.

In equity news, shares in gambling group Flutter fell after reporting annual core profit at the lower end of its guidance range.

UK broadcaster ITV fell as it said advertising revenue would be lower in the first quarter of 2023.

Building materials group CRH gained 8% after posting a jump in full-year earnings on Thursday as sales grew, underpinned by the company’s integrated solutions strategy and good demand, and said it was planning to recommend a transition to a US primary listing this year.

German chemicals maker Covestro fell 6% after the company said it expected 2023 core profit to be significantly lower than last year, as the global polycrisis lead to a sharp rise in energy and raw material prices.