This is CNBC's live blog covering European markets.

European stock markets closed higher on Friday and notched strong first-half gains in a resurgence that came despite interest rate hikes and bank failures.

The pan-European Stoxx 600 index provisionally closed 1.2% higher for the session, with all sectors and major bourses in positive territory. Over the first half of the year, the index ended up roughly 8.8%.

It comes as euro zone inflation data fell more than expected for the month of June. The figure came in at 5.5% this month, indicating that the fiscal tightening of the European Central Bank could be starting to have the desired effect. Core inflation, which excludes food and energy, rose, however, coming in at 5.4%.

European Central Bank President Christine Lagarde said Tuesday that inflation is still too high and it's too early to declare victory over consumer price rises.

"Inflation in the euro area is too high and is set to remain so for too long. But the nature of the inflation challenge in the euro area is changing," Lagarde said from the Sintra central banking event in Portugal.

Several sectors posted gains of more than 1% on Friday, including banks, chemicals, insurance and retail stocks.

European equity markets ended Thursday's session just 0.1% higher, bolstered by robust earnings and a subsequent 17% share price uptick from H&M.

Elsewhere in the world, Asia-Pacific markets were mixed after China's factory activity shrunk for a third consecutive month in June. U.S. stocks rose Friday as investors Wall Street got another hint of encouraging inflation news.

Stock on the move: Kion Group up 6%, Bawag falls 6%

Germany's Kion Group rose 6% on Friday, climbing toward the top of the European benchmark after both Deutsche Bank and JPMorgan increased their target price for the stock.

Austrian bank BAWAG, meanwhile, tumbled to the bottom of the index. Shares of the Vienna-headquartered firm fell 6.1% after activist investor Petrus Advisers criticized the management.

— Sam Meredith

Oil prices on track to post consecutive quarterly losses

International benchmark Brent crude futures were on track to post their fourth consecutive quarterly decline amid fears major central banks may not be done with interest rate hikes.

Brent futures traded 0.3% higher at $74.61 a barrel on Friday afternoon. It leaves the contract on course to end the second quarter down 6.8%.

U.S. West Texas Intermediate futures, meanwhile, rose 0.7% to trade at $70.37. It is on track to end the second quarter down 7.7%, marking what will be its second straight quarterly loss.

— Sam Meredith

Euro zone inflation data dips in June

Euro zone inflation data dipped to 5.5% in June, according to preliminary data. Core inflation, however, which excludes volatile energy and food prices, rose to 5.4%.

The reading means that headline inflation is now at its lowest point since January 2022, according to Eikon data, but prices remain well above the European Central Bank's 2% target.

"We think headline inflation will fall further, and that the core will ease back, albeit remain sticky," Melanie Debono, senior Europe economist at Pantheon Macroeconomics, said in a research note.

European Central Bank Governing Council member Gediminas Simkus told CNBC earlier this week that he expects the central bank to hike rates in July.

Read the full report here.

— Sam Meredith

European markets up 7.5% year-to-date; UK's FTSE 100 lags

As the first half of the year comes to an end, the pan-European Stoxx 600 index is up 7.47% since the start of 2023.

German stocks have rallied since January, with the DAX up 14.53% year to date, and French stocks followed a similar trajectory, with the CAC 40 seeing a 12.9% uptick.

Italy's FTSE MIB is up 17.8%, Spain's IBEX 35 has gained 15.57% and Switzerland's SMI is up 4.1%.

Britain's FTSE 100 has lagged, however, making gains of just 0.27% over the last six months.

— Hannah Ward-Glenton

European markets: Here are the opening calls

European equity markets are expected to tick upwards in Friday trading, according to forecasts by IG. The U.K.'s FTSE 100 is seen to opening 20 points higher at 7,491.2, while Germany's DAX looks set to gain 34.5 points at 15,969.4. The data suggest that France's CAC will rise 13.6 points at 7,328.4, and Italy's MIB will jump 68.5 to 28,091.0.

— Hannah Ward-Glenton

CNBC Pro: Aging populations are creating major opportunities, fund manager says. Here's how he's investing

Populations across the world are living for longer, and that's opening up a slew of investment opportunities, according to fund manager Dani Saurymper.

"This is an investable area today, and it will become increasingly more relevant and apparent as we go through forward into the future," he told CNBC Pro Talks last week.

Here's what Saurymper says about how to invest in an aging population — and which stocks to buy.

CNBC Pro subscribers can read more here.

— Weizhen Tan

China's factory activity remains in contraction territory

China's factory activity data stayed in contraction territory for the month of June, according to the National Bureau of Statistics' latest purchasing managers' index reading.

The NBS manufacturing PMI came in at 49, below the 50-mark that separates contraction and growth for the third consecutive month.

The PMI reading in May stood at 48.8, the lowest since December. The Chinese yuan weakened to 7.26 against the U.S. dollar.

— Jihye Lee

CNBC Pro: UBS identifies a catalyst that could trigger a stock market sell-off in the second half

Strategists at UBS have identified a number of factors that could spark a potential sell-off in stock markets in the second half of this year.

The investment bank said while many analysts had predicted that a recession would put stocks at risk, the catalyst for a downturn may now be in sight.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Fed's preferred inflation gauge is out Friday

The Federal Reserve's favorite inflation gauge — the personal consumption expenditures price index — will be out on Friday morning.

Economists polled by Dow Jones are calling for core PCE, which excludes volatile energy and food prices, to have gained 0.3% on a monthly basis in May and to have added 4.7% year over year. In April, the gauge ticked higher by 0.4% from the prior month and gained 4.7% on an annualized basis.

St. Louis Fed President Jim Bullard has pointed to three reasons behind why the Federal Open Market Committee favors PCE over the consumer price index. First, PCE accounts for substitutions that people make as they substitute some goods and services for others. Second, the PCE has more comprehensive coverage of goods and services. Finally, historical PCE data can be revised.

-Darla Mercado