Europe close: Stocks end higher on China news, US CPI data

Stocks in Europe finished higher helped by news that Beijing had lifted a ban on group travel outside of China and a slightly lower than expected reading on US inflation.

"It's been another positive session for markets in Europe, although the FTSE100 has underperformed against its European peers due to over 10% of the index going ex-dividend, including the likes of AstraZeneca, Rio Tinto, Shell, NatWest, Barclays, BP, and HSBC, which has served to knock over 30 points off the index," said Michael Hewson, chief market analyst at CMC Markets UK.

"The announcement by China to end its ban on overseas travel groups to other countries has also helped boost travel, leisure, and the luxury sector, especially the CAC 40, with LVMH, Hermes, and Kering, getting a lift along with Burberry in the UK."

Against that backdrop, the pan-European Stoxx 600 was 0.79% higher at 464.23, alongside a 0.91% gain for the German Dax to 15,996.52 and an advance of 0.94% to 28,575.05 for the FTSE Mib.

Dutch TTF natural gas futures dipped 2% to €37.54/MWh, having surged during the previous session due to the risk of strikes in the sector Down Under that might threaten winter supplies.

Headline US CPI was up by 3.2% in July in annual terms and by 4.7% at the core level.

Both readings came in a tenth of a percentage point shy of economists' forecasts.

German insurer Allianz posted better-than-expected second quarter operating profits of €3.78bn, lifting its shares by 5%.

Henkel's delivered first half organic sales of 4.8%, which were ahead of analysts' estimates, alongside stronger-than-expected operating margins of 11.5%, for a 1% rise in the share price.