European shares rise ahead of euro zone inflation data, but set for quarterly loss

European shares rose on Friday, helped by gains in luxury and technology stocks, as investors focused on a slew of economic data towards the end of a tumultuous quarter. The STOXX 600 index climbed 0.8% by 0755 GMT, with all eyes on the euro zone inflation data, due at 0900 GMT, that could help determine the European Central Bank's monetary policy path.

European shares rose on Friday, helped by gains in luxury and technology stocks, as investors focused on a slew of economic data towards the end of a tumultuous quarter.

The STOXX 600 index climbed 0.8% by 0755 GMT, with all eyes on the euro zone inflation data, due at 0900 GMT, that could help determine the European Central Bank's monetary policy path. The index is, however, set to end the quarter nearly 2% lower, with Germany's DAX lagging regional peers with a 4.6% loss.

German retail sales unexpectedly fell in August, data showed, as persistently high inflation took its toll on consumption in the euro zone's largest economy. In France, inflation unexpectedly slowed in September as easing price rises in the food sector outpaced higher prices in the energy sector, preliminary EU-harmonised official data showed.

"We see a further decline in core and food inflation (in France), while the energy component is now more uncertain," said Claus Vistesen, chief euro zone economist at Pantheon Macroeconomics, in a note. "Looking ahead to today's EZ inflation print, we're sticking with our forecast for a 0.5pp decline, to 4.7%, though we now think core inflation fell a bit further than we initially expected, to 4.8%."

Luxury stocks such as LVMH and Richemont gained 3.2% and 2.8%, respectively, boosting the pan-European index in early trading on Friday. Shares of Adidas climbed 5.8% after U.S. peer Nike beat profit estimates on Thursday.

Rate-sensitive technology stocks gained 1.9% as euro zone government bond yields dropped from multi-year peaks. Tech stocks have underperformed this quarter, and are down over 9% so far, as bond yields rallied on worries about higher-for-longer interest rates.

London's commodity-heavy FTSE 100, meanwhile, climbed 0.6% and was on track for 1.5% gains this quarter, outpacing European peers. Britain's economic performance since the start of the COVID-19 pandemic was stronger than previously thought, with faster growth than Germany or France, according to revisions to official data released on Friday.