Europe close: Stocks end mostly lower despite positive inflation data

European equity markets were mostly on Friday, even as inflation registered a welcome fall in the Continent's largest economy, Germany.

The pan-European Stoxx 600 drifted lower by 0.09% to 484.83, alongside a 0.22% dip for the German Dax to 16,926.50.

Italy's FTSE Mib was the exception, managing to add 0.3% to 31,156.06.

German inflation fell to 2.9% January in line with preliminary data and down from 3.7% in December, driven by a sharp fall in energy costs, according to official data released on Friday.

There was a sharp drop in energy inflation to -2.8% from 4.1% in December, despite the discontinuation of the brake on energy prices and the introduction of a higher carbon price, which affects the price of fossil fuels such as motor fuels, heating oil and natural gas.

"In the markets, it’s been a flat old week in Europe with little in the way of direction or movement for the major indices, despite a bunch of corporate earnings ... macro is maybe still in charge here and the bond markets haven’t done much either. The CAC in Paris has risen almost 1% this week but the DAX and FTSE are within a quarter of a percent of where they started," said Finalto chief market analyst Neil Wilson.

In equity news, shares in Sweco plunged 15% to the bottom of the Stoxx 600 after the Swedish engineering and architecture consultancy company missed fourth-quarter earnings expectations.

Shares in Ubisoft rose 14% in early deals as the French video game company pointed to a “turnaround” in its output in its latest earnings report.

L’Oreal shares were down 8% after reporting lower-than-expected fourth-quarter sales Thursday in a sign of continued pressure on the luxury market.

Luxury goods maker Hermes gained 5% as results pleased investors.