Europe midday: Shares edge ahead despite weak EZ data, slumping banks

European shares struggled into positive territory despite a hotter-than-expected US CPI reading led to renewed calls for higher interest rates from Fed officials, weaker eurozone industrial production data and sliding banking shares after Barclays turned in disappointing annual results.

The pan-European Stoxx 600 index was up 0.16% at 1145 GMT with major markets all in the green. Britain’s FTSE index gained as inflation fell further than forecasts.

Eurozone industrial production showed a decline of 1.1% from November - against a forecast decline of 0.8% - and 1.7% year on year, according to official data. The fall was driven by intermediate goods which were 2.8% lower month on month.

Elsewhere, durable consumer goods output declined 1.4% compared with November, nondurable consumer goods by 1.0%, and capital goods by 0.4%, while production of energy grew by 1.3%.

In the US January's CPI rose by 0.5% month-on-month - a tenth of a percentage point more than anticipated by economists. At the core level meanwhile, CPI increased 0.4% on the month, ahead of consensus estimates for a jump of 0.3%.

The print was followed by hawkish comments from Dallas Fed chief Lori Logan Thomas Barkin of the Richmond Fed, who both said that rates would probably have to stay higher for longer to fight inflation.

In the UK, consumer price inflation eased more than expected in January, according to figures released on Wednesday by the Office for National Statistics.

The annual rate of CPI fell to 10.1.% in January from 10.5% in December, coming in below analysts' expectations of 10.3%. This was the third drop in three months, after CPI hit a 41-year high of 11.1% in October 2022.

The ONS said the largest downward contribution came from transport - particularly passenger transport and motor fuels - and restaurants and hotels, helping to offset rising prices in alcoholic beverages and tobacco.

In equity news, Barclays shares fell as the bank reported a 14% fall in annual profit.

Glencore was also lower despite declared a $7.1 billion payout to shareholders after a record trading profit.

Hargreaves Lansdown gained as the financial services platform posted strong growth on both its top and bottom lines at the first half-year stage, despite the impact from "challenging" external conditions and low investor confidence on asset values and stockbroking volumes.

Reporting by Frank Prenesti for Sharecast.com