Europe close: Stocks end Q2 on an up note

European shares extended gains on Friday as US inflation came in as anticipated and eurozone inflation waned as expected.

"At the beginning of the year even the most optimistic forecasters had not expected to see as stellar a performance as has been seen year-to-date in many of the world's largest stock indices," said Axel Rudolph, senior market analyst at IG.

"[...] The question is whether the second half of the year will look different as investors become increasingly complacent as shown by the ongoing "call" buying frenzy, volatility dropping to pre-Covid levels and as the CNN Fear and Greed Index remains in "extreme greed" territory."

The pan-European Stoxx 600 was up 1.16% at 461.93 with all regional bourses higher.

Germany's Dax gained 1.26% to 16,147.90, alongside a 1.19% advance on the Cac-40 to 7,400.06.

Boosting sentiment, the U.S. Department of Commerce reported that the price deflators for headline and core personal consumption expenditures both printed at ahead by 0.3% month-on-month, which was in line with economists' forecasts.

In other economic news, Inflation pressures in the single currency bloc ebbed in June. According to Eurostat, the headline rate of euro area consumer price increases slowed from the 6.1% year-on-year pace observed in May to 5.5% for June, as expected.

At the core level on the other hand, the annual CPI rate edged up from 5.3% to 5.4%, although economists too had correctly anticipated that as well.

As an aside, China’s factory activity data, which was published overnight, stayed in contraction territory for the month of June, according to the National Bureau of Statistics’ latest purchasing managers’ index reading.

The PMI came in at 49, below the 50-mark that separates contraction and growth for the third consecutive month. May's reading stood at 48.8, the lowest since December.

In equity news, shares in LEG Immobilien jumped as the German property company raised its outlook for 2023.