Europe open: Stocks struggle for direction ahead of US inflation data

European stock markets opened broadly flat on Friday morning, as investors scaled back their appetite for risk ahead of key US inflation figures due out later in the session.

The pan-European Stoxx 600 index was down 0.1% early on, with most major markets struggling for direction. The FTSE 100 and FTSE MIB were both down 0.1%, the Dax and Cac 40 were flat, while the Ibex 35 rose 0.2%.

"It’s also been another disappointing week for European markets with the DAX on course for its 6th successive weekly decline falling back to levels last seen in March, while the FTSE100 has also struggled for gains these past few days," said Michael Hewson, chief market analyst at CMC Markets.

The US personal consumption expenditures index – the Federal Reserve's preferred measure of inflation – is expected to have falling to 3.4% in September, from 3.5% in August, while core inflation is forecast to have eased to 3.7% from 3.9%.

"The declining trend in inflation, along with the recent increase in Treasury bond yields, contributes to the expectation that the Fed will maintain unchanged interest rates in its upcoming meeting next week," said Patrick Munnelly, market expert at Tickmill Group.

"Nevertheless, robust economic activity, as indicated by the Q3 GDP report released yesterday, could potentially complicate the longer-term policy outlook."

In European company news, Sanofi was making headlines on the back of plans to split its consumer-healthcare and pharmaceutical business, allowing it to focus on medicines and vaccines, following similar moves by competitors Johnson & Johnson and GSK in recent years. The group said it was exploring options but one possible scenario was a separate listed entity for the consumer operations.

The news came as the company missed expectations with third-quarter sales falling 4% to €11.96bn, below the consensus forecast of €12.06bn. The stock was flat early on.

Remy Cointreau shares dropped after the drinks maker slashed its sales forecasts for the current financial year after a 17% drop in revenues in the second quarter.

Both Air France-KLM and IAG were firmly lower after the airlines' quarterly results, while NatWest tanked after missing profit estimates and reporting a lower net interest margin on the back of customers moving more cash into savings.