European markets cautiously higher as euro zone inflation falls less than expected

This is CNBC's live blog covering European markets.

LONDON — European markets moved higher on Friday to start the new trading month after a winning February, as investors assessed fresh inflation data out of the euro zone.

The pan-European Stoxx 600 was up 0.4% by early afternoon, with banks adding 1.3% to lead gains while media stocks fell 0.5%.

February's flash euro zone inflation reading showed the headline consumer price index fell to 2.6% from January's 2.8%. Economists polled by Reuters had forecast a headline reading of 2.5%.

The European Central Bank will be watching Friday's reading closely as it charts its course of future interest rate cuts, with economic growth remaining stagnant across much of the bloc. The market expects the ECB to begin cutting in June, alongside the Fed.

The continental blue chip index closed 0.1% higher on Thursday after fresh data showed the core U.S. personal consumption expenditures price index — the Federal Reserve's preferred measure of inflation — rose in line with expectations by 0.4% monthly and 2.8% annually in January.

The Stoxx 600 notched an all-time high last month, powered by the 11 GRANOLAS large-cap stocks that made up half of the gains across the entire Stoxx 600.

The group comprises GSK, Roche, ASML, Nestle, Novartis, Novo Nordisk, L'Oreal, LVMH, AstraZeneca, SAP and Sanofi.

In Asia-Pacific, Japan's Nikkei 225 closed at a fresh record high on Friday, just short of the 40,000 level, while Chinese markets rose on the back of fresh manufacturing data from the mainland.

Stateside, U.S. stock futures were cautiously higher after Wall Street wrapped a fourth consecutive winning month, with the tech-heavy Nasdaq Composite reaching its first closing record since November 2021.

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