Europe close: Shares end week on a positive note

(Sharecast News) - European shares ended the week on the front foot even as German inflation data showed food and energy prices remained stubbornly high. The pan-European Stoxx 600 index edged up 0.22% to 454.66, with all major bourses trading higher alongside.

Germany's Dax was 0.14% higher to 15,740.30. alongside a 0.62% gain for the Cac-40 to 7,240.77, while Spain's Ibex 35 added 0.59% to 9,364.60.

Investor worries over more rate rises have heightened as declines in inflation in the US and Europe are slower than traders hoped for, meaning any cuts are off the agenda for the short term at least.

"The spectre of interest rate rises which may have further to run has stalled progress over the last few trading sessions, and the latest economic news from the US in particular has strengthened the possibility," said Richard Hunter, head of markets at Interactive Investor.

"Lower than expected jobless claims suggest that the labour market remains resilient despite the rate hikes so far. In addition, a further rise in labour costs and a recent spike in energy prices are increasing the difficulties of getting the inflation genie back into the bottle."

"As such, the Federal Reserve may consider that it has leeway to raise rates once more towards the end of the year. Its insistence that it will remain data dependent, when the data coming through is strong, has left investors who were hoping for imminent rate cuts high and dry."

In economic news, German inflation eased to 6.1% in August - confirming initial readings - as elevated food and energy prices continued to outstrip the overall rate, according to official data released on Friday.

Core inflation, which strips out volatile food and energy prices, was unchanged at 5.5%, demonstrating that inflation also remained high in other product groups.

In France, industrial output rebounded more than expected in July, climbing 0.8% on a monthly basis compared with expectations of a 0.1% rise, after a sharp 0.9% fall in the prior month.

Spanish industrial Production in Spain decreased 1.80% in July, after an upwardly revised 3.2% slump in June and compared with market forecasts of a 2% drop.

It marked the fourth consecutive month of declines in industrial activity, as output continued to fall for energy, down 10.8% vs 9.8% in June, durable consumer goods (-7.3% vs -5.7%) and intermediate goods (-2.6% vs -4.5%).

In equity markets, shares in JD Sports jumped after Berenberg lifted its price target on the sports fashion retailer to 225p from 210p and said investors still underappreciate the strength of the company's model, its positioning and the international opportunity.