European shares hit all-time highs on Friday, ending a turbulent month on a positive note after a sharp drop in euro zone inflation boosted market expectations of a rate cut in September.
Stock movements
The pan-European STOXX 600 index closed 0.1 percent higher, ending above 525 points for the first time after touching a record intraday high of 526.66 points.
The index advanced 1.2 percent in August, achieving a second consecutive monthly increase.
A preliminary reading from the European Union's statistics office Eurostat showed that inflation in the 20-nation euro zone fell to 2.2% in August, its slowest pace since July 2021, approaching the European Central Bank's target of 2%.
The data reinforced current expectations that the European Central Bank will cut borrowing costs at its meeting in September.
Data showing a slowdown in US inflation also lifted sentiment as markets looked ahead to the US Federal Reserve cutting interest rates next month.
The interest-sensitive real estate sector was the best performing sector, rising 1.4 percent, followed by the banking index, which rose 0.8 percent.
