European shares gain for third day as France inflation slows

(Reuters) - European shares extended gains on Wednesday as a lower inflation reading from France boosted sentiment, while investors awaited euro zone business activity data and minutes from the U.S. Federal Reserve's last meeting.

The pan-European STOXX 600 rose 0.5% by 0808 GMT, while France's CAC 40 added 0.8%.

Preliminary data showed inflation in France slipped in December from a record high in the previous month, adding to a slew of encouraging data this week from improving euro zone manufacturing numbers to a slowdown in Germany's inflation.

The index has risen 2.7% so far in its first trading week of the year.

Focus is on December's euro zone business activity numbers due at 0900 GMT after data last month showed it declined for a fifth month in November, suggesting the block was sliding into a recession.

Investors also await minutes from the Fed's last meeting for cues on the central bank's monetary policy tightening path.

Sanofi edged up after the French healthcare company said it expected its fourth-quarter results, which will be published early next month, to reflect a boost from foreign exchange movements and flu vaccine sales.

(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Vinay Dwivedi)