Europe midday: CPI data boosts Stoxx; French spirit makers cheer China

European shares extended gains as data showed inflation falling in Spain and the German regions, boosting hopes of another rate cut from the European Central Bank and pushing the benchmark Stoxx index towards record territory.

The pan-regional Stoxx 600 was up 0.68% to 524.66 in early deals, nudging towards its record high of 525.59 hit on June 7.

On the economic front, there was a welcome and sharp fall in Spanish inflation with the headline figure plunging to 2.2% from 2.8%. A national figure was expected from Germany, but data from the country's regions all showed declines.

"We are already starting to see confidence build that tomorrow's headline eurozone report could be a blockbuster event that puts additional pressure on the ECB to slash rates," said Scope Markets analyst Joshua Mahony.

Meanwhile, there was a further boost as the eurozone's August Economic Sentiment Indicator recorded a surprise jump month on month, according to official data published on Thursday, beating expectations of no gain.

The ESI jumped to 96.6 from 96 in July, with services, industry and retail trade confidence driving the rise, while confidence among consumers and in construction remained broadly stable.

In equity news, French spirits makers were in focus after China's commerce ministry said it will not impose provisional anti-dumping measures on brandy imported from the European Union.

The announcement saw shares in Remy Cointreau and Pernod Ricard make strong gains.

Shares in British Gas owner Centrica rose as consumers faced the prospect of a 10% jump in energy bills this winter.

IG Group shares were down as Jefferies said late on Wednesday that Tastytrade founders Tom Sosnoff and Scott Sheridan had sold 6.5m shares in a placing to a limited number of institutional investors. Tastytrade was acquired by IG in 2021 for $1bn.

Reporting by Frank Prenesti for Sharecast.com