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Paris - European shares rose in early trade on Friday, recovering some of the ground lost in the previous session as investors awaited inflation figures that may shed light on the European Central Bank's next policy move.
Eurozone inflation, due at 11:00, is seen falling to 0.3% in August following a surprise dip to 0.4% in July, according to a Reuters poll of analysts.
The data, which temporarily relegated events in Ukraine to the sidelines, will be a focal point at next week's ECB meeting, fuelling a debate about whether the central bank should accelerate existing policy measures to fight the risk of deflation.
"It's a bit tense ahead of the inflation figures. With the recent rally, the market may have gotten ahead of itself in pricing in fresh measures by the ECB," Saxo Bank trader Pierre Martin said.
"The recent drop in the euro currency should help support the eurozone economy, so Draghi might be tempted to wait a little bit."
At 10:10, the FTSEurofirst 300 index of top European shares was up 0.3% at 1 373.45 points, leaving it on track to record a gain of 1.8% in August, its best monthly performance since May.
Shares in Britain's biggest retailer Tesco dropped 6.6% after it cut its profit forecast for the third time in three years and slashed its interim dividend by 75%.
The warning hit the shares of other UK supermarket chains, with Sainsbury down 3.3% and Morrisons down 3.4%.
Shares in European airlines fell after a small eruption occurred north of Iceland's Bardarbunga volcano, which prompted the Icelandic Met to raise the warning code for aviation to red, the highest level.
In 2010, an ash cloud from Iceland's Eyjafjallajokull volcano closed much of Europe's airspace for six days.
Shares in Air France were down 1.7% and easyJet down 1.1%.
Shares in Fiat gained 1.6% after the Italian car maker said its merger with Chrysler was on track to go ahead as planned in October.
Fiat said it did not expect a €500m cap on the money it set aside to pay off any dissenting shareholders over the merger would be breached.
The Ukrainian crisis was still a major factor for investors after Ukraine's president said Russian troops had entered his country in support of pro-Moscow rebels who captured a key coastal town.
US President Barack Obama spoke by phone on Thursday with German Chancellor Angela Merkel. The White House said the two agreed the United States and Europe should consider more sanctions against Moscow.
