By Sruthi Shankar, Siddarth S and Shristi Achar A
(Reuters) -European stocks pared early gains on Thursday after U.S. September inflation rose by more than expected, while Novo Nordisk (CSE:NOVOb)'s kidney drug trial success helped lift Denmark's benchmark index to a record high.
The pan-European STOXX 600 index was up 0.1%, after earlier hitting a three-week high.
"Today's US CPI number was not necessarily enough to keep the bullish enthusiasm going," said Steve Sosnick, chief strategist at Interactive Brokers.
U.S. consumer prices (CPI) rose 0.4% in September compared to forecasts of a 0.3% rise from economists polled by Reuters. On an annual basis, CPI rose to 3.7% versus estimates of 3.6%.
Energy stocks climbed 1.3%, leading sectoral gains, after oil prices rose on expectations that U.S. interest rates had peaked. [O/R]
Meanwhile, Novo Nordisk shares jumped 4.2% and touched a fresh record high after the Danish drugmaker had reported early signs of success in delaying the progression of kidney disease in diabetes patients.
The broader OMX Copenhagen 20 hit a record high and closed 2.3% higher.
Longer-dated eurozone bond yields and U.S. Treasuries crept higher after the U.S. CPI data, having fallen earlier in the session. [GVD/EUR] [US/]
Rate sensitive utilities and real estate stocks fell 0.7% and some 1% respectively.
Minutes from the European Central Bank's September meeting, released on Thursday, showed a division among policymakers when they opted to raise the deposit rate to a record 4%, but signalled an end to the tightening cycle.
Media stocks jumped 0.9% to a fresh 22-year high, with advertising group Publicis hitting a record high after raising its 2023 sales and margin forecasts.
In Britain, Restaurant Group shares surged 36% after an Apollo Global owned and managed vehicle announced the acquisition of the Wagamama owner for 506 million pounds ($623 million) in cash.
Halfords (LON:HFD) shares closed at a two-month high, after Betaville reported there has been takeover interest.
Meanwhile, Barclays (LON:BARC) dropped 3.1%, underperforming the wider market, with several sources attributing the fall to comments by the bank's CEO about the broader sector outlook.