European stocks rose, Thursday, supported by stocks of consumer goods and energy companies, but data showing that inflation in the euro zone is still high reinforced fears that the European Central Bank would adopt a further increase in interest rates.
Consumer price inflation in the 20 European single currency countries increased to 8.5 percent in February, compared to 8.6 percent in the previous month, on the back of lower energy prices, but the rate was higher than the average of 8.2 percent in a Archyde.com poll of economists.
Although inflation is now below its peak in October of more than 10 percent, there are still concerns that an earlier energy surge has seeped into the economy, making it more difficult to curb rising prices.
stock movements
The pan-European Stoxx 600 index recovered early losses and closed up 0.5%.
Energy stocks rose 1.4 percent, supported by higher oil prices amid signs of a strong economic recovery in China, the largest importer of crude.
A sharp fall in the pound sterling led the British “FTSE 100” index, which is highly sensitive to the stocks of export companies, to rise 0.4 percent.
European Central Bank President Christine Lagarde said lower prices were not stable and interest rates would have to be raised and kept high for some time.
European markets ended the first two months of the year higher for the first time in four years, supported by the 18 percent rise in bank stocks, as they benefited from higher net interest-related income.
Irish stocks led the gains among their regional peers, rising 2.1 percent, supported by building materials (CRH) rising 7.9 percent following publishing better-than-expected results.
