Europe open: Stocks up on US CPI data, UK GDP growth

European shares opened higher on Friday as investors were cheered by US inflation beating estimates and the UK economy unexpectedly growing in November, suggesting that the recession may not be as steep as first feared.

The pan-European Stoxx 600 index was up 0.39% at 0838 GMT with all major bourses higher. Wall Street stocks finished in positive territory overnight, while Asian stock markets advanced.

In the US the annual rate of headline consumer prices fell from 7.1% for November to 6.5% in December, beating consensus estimates for a print of 6.6%.

Fed policymakers, relieved at the inflationary easing, signalled that a rate-hike slowdown could be forthcoming. Bank of Philadelphia President Ed Harker indicated in a speech Thursday that substantial interest rate rises may be over, suggesting that while the Federal Reserve will need to continue hiking, it could do so in 25 basis point increments.

Meanwhile in the UK, the UK economy unexpectedly grew in November, official data showed on Friday.

According to the Office for National Statistics, monthly gross domestic product nudged 0.1% higher in November, following growth of 0.5% in October. Analysts had been expecting a 0.2% decline.

In equity news, shares in gambling group Kindred slumped after it issued a profits warning.

The company said revenues had been hit by the football World Cup, which disrupted the sporting calendar and resulted in around 25% fewer top football league fixtures compared to the fourth quarter last year.

“Contrary to expectations, turnover from the World Cup was not enough to offset the impact of reduced fixtures elsewhere. This combined with a lower than long-term average sports betting margin and a few isolated events during the quarter had a negative impact on the group's quarterly performance,” Kindred said.

BA and Iberia owner IAG and budget airline Wizz Air flew higher. Wizz was boosted by an upgrade to 'outperform' at Davy. Sector peers easyJet and Lufthansa were also in favour.

Reporting by Frank Prenesti for Sharecast.com