Europe close: Stocks rise after slightly softer-than-expected US CPI

(Sharecast News) - European shares posted solid gains on Wednesday following the release of slightly weaker-than-expected US consumer price data for the month of July.

"The key event of the week is out of the way, but after their leap higher over the past week stocks look a little exhausted. US inflation still seems to be moving in the right direction, and investors seem happy to shrug off the monthly rise given that the annual figure declined," said IG chief market analyst Chris Beauchamp.

"But there is a sense of 'where do we go from here?' now. Having recouped so much of their recent losses so quickly, equities are now bereft of a catalyst in the short-term."

The pan-regional Stoxx 600 index was up 0.49% at 504.1, alongside a 0.79% advance on the French Cac-40 to 7,333.36 and a 1.0% gain for Italy's FTSE Mib to 32,328.03.

According to the US Department of Labor, the country's consumer price index rose at an annual pace of 2.9% in July (consensus: 3.0%) after a 3.0% rise in June.

Economists said the CPI report justified a 25 basis point rate cut by the Federal Reserve in September, but not a larger cut.

However, at least a few economists believed that a weak August non-farm payrolls report might yet see the Fed go for 50bp.

Earlier, Eurostat reported that the eurozone economy grew by 0.3% in the second quarter on a seasonally adjusted basis.

Gross domestic product expanded at the same pace in the broader European Union.

In equity news, shares in Straumann put a smile on investors faces as the Swiss dental firm lifted guidance and said it was selling its DrSmile aligner business. The stock was up 13%.

Playtech surged 14% after confirming it is in talks with Flutter Entertainment about the possible sale of its Italian business, Snaitech. Flutter stock was also on the march on the news.