European shares rose for the third session as inflation slowed in France

European stocks extended their rally on Wednesday after a lower inflation reading in France boosted sentiment as investors await data on business activity in the eurozone and minutes from the Federal Reserve’s last meeting.

The Stoxx 600 index of European shares rose 0.5 percent by 0808 GMT, while the French CAC 40 index rose 0.8 percent.

Preliminary data showed French inflation eased in December from a record high the previous month, adding to a host of encouraging data released this week, from improving euro zone manufacturing figures to slowing inflation in Germany.

The index rose 2.7 percent in the first trading week of the year.

The market is now focused on data on business activity in the euro zone for December, which is due at 0900 GMT, after last month’s data showed it fell for the fifth consecutive month in November, suggesting that the region is on its way to a recession.

Continuators are also awaiting the minutes of the US Central Bank’s meeting for last month, to find out its course regarding tightening monetary policy.

Sanofi shares rose after the French healthcare company said it expected its fourth-quarter results, which are due to be published early next month, to show profit growth on exchange rate movements and sales of influenza vaccines.