Europe close: Stocks finish week with gains despite inflation worries

European shares briefly touched record highs in muted trade on Friday as investors maintained a cautious tone, yet they saw the week out with gains despite inflationary worries with luxury goods retailers sparkling.

The pan-European Stoxx 600 was up 0.30% at 486.75, alongside a 0.45% rise for France's Cac-40 to 7,091.40, while the FTSE Mibtel was ahead by 0.36% to 27,732.39.

“This week’s events, particularly around inflation are fomenting increasing discussion as to whether central banks might have to shift their policy stance to reflect that the price rises currently being seen could only just be the beginning of what consumers are about to bear as we head towards 2022,” said CMC Markets analyst Michael Hewson.

“For months they have been assuring the markets that inflation is transitory, only for them to then have to shift their CPI forecasts higher with each passing meeting.”

“As we come to the end of the week it’s been a solid week for European stocks with the FTSE100 getting to within touching distance of the 7,400 level, and its third successive weekly gain. It’s also shaping up to be a positive week for the DAX although the progress has been glacial.”

In equity news, shares in Cartier owner Richemont surged 11% after the company beat profit estimates in the first half of the fiscal year and saying it is seeking investors for its loss-making Yoox business.

Sector peer LVMH jumped 2.5% after news that Louis Vuitton was planning to open its first duty-free store in China.

AstraZeneca fell 7% after its quarterly profit missed expectations but the company said it would start making a profit from its Covid vaccine from the fourth quarter onwards.