Wednesday saw European markets closing higher after a varied trading day, with investors absorbing the latest U.S. inflation report and U.K. gross domestic product figures. The benchmark Stoxx 600 index ended the day up by 0.2%. Retail stocks notably surged by 3.3%, with top gainers including Germany's Zalando and Spain's Inditex, both reporting positive results.

Tuesday's U.S. inflation data for February revealed a 0.4% month-over-month increase and a 3.2% rise from the previous year, aligning with economists' monthly forecasts but surpassing their expectations for the annual figure of 3.1%, according to the Dow Jones consensus.

Following the release of the data, U.S. stocks surged, with both the S&P 500 and Nasdaq Composite each climbing by over 1%, although gains have since been pared.

Investors turned their attention to U.K. economic data on Wednesday, which indicated a return to modest growth in January, driven by a 0.2% increase in services output and a rebound in construction output.

James Smith, developed markets economist at ING, noted that while it's important not to overstate the significance of one month's data, the figures were indicative of a gradual recovery in activity over the coming months.

Smith commented, "We believe the decline in overall fourth quarter GDP, marking the second consecutive quarter of negative growth and thus a technical recession, is unlikely to be repeated in the first quarter of 2024."

Meanwhile, sportswear giant Adidas released its corporate results, revealing an operating loss of 377 million euros ($412 million) in the fourth quarter and cautioning about a sales decline in its overstocked North American market in 2024.