This was CNBC’s live blog covering European markets.
European markets closed lower on Friday, led by declines in the travel sector which was down 1.6% after the closure of Heathrow airport.
The pan-European Stoxx 600, French CAC 40 and the U.K.’s FTSE 100 all closed around 0.6% lower, while the the German DAX shed 0.5%.
The travel and leisure sector lost about 1.6% after London’s Heathrow Airport closed on Friday following a fire at a nearby electrical substation. British Airways-owner International Airlines Group was trading around 1.9% lower.
Basic resources — including stocks such as ArcelorMittal and wood pulp processor Stora Enso — were down about 2.3%.
European investors digested monetary policy updates that came from multiple central banks in the region, as well as the U.S. Federal Reserve, this week.
The Bank of Russia held its key rates at 21% on Friday, citing high inflationary pressures. On Thursday, the Swiss National Bank trimmed interest rates by 25 basis points, while the Bank of England held rates steady in the U.K. and Sweden’s Riksbank also opted not to alter interest rates.
“Since [our] previous meeting, global trade policy uncertainty has intensified, and the United States has made a range of tariff announcements, to which some governments have responded,” the Bank of England said on Thursday. “Other geopolitical uncertainties have also increased and indicators of financial market volatility have risen globally.”
It came after the Fed also kept its key interest rate steady on Wednesday. Although the central bank said it still sees two rate cuts happening this year, officials cut their 2025 economic growth forecast for the U.S. and noted that uncertainty had increased, with tariffs poised to add inflationary pressure.
— CNBC’s Sophie Kiderlin and Jeff Cox contributed to this report.
The world is ‘not ready’ for the water consumption needs of AI: Utilities CEO
Fabrizio Palermo, CEO of Italian utilities company ACEA, said the world is not prepared for the water consumption demands of running artificial intelligence.
“Estimates by year 2030 are saying that basically, the water consumption linked to AI can reach a level as high as the full consumption of the US,” Palermo told CNBC’s “Squawk Box Europe. “This is significant, and clearly the world is not ready for that.”
“The situation is critical. We are going towards what can be called the new water era … we need to be prepared for this new water transition,” he added.
Palermo also said that AI can help with water management, such as predicting future water availability. He added that awareness of the demand for water was “rising,” with the European Commission’s appointment of a commissioner for water resilience.
— Lucy Handley
A potential market ‘boost’ in second half of the year: JPMorgan
JPMorgan‘s Head of Global Multi-Asset Strategy John Bilton said markets will likely be in a “better place” next year.
“If we take a step back and think: ‘Where are we going to be a year from now?’ chances are we’re probably still going to be in a better place, and that starts to inform how you think about taking risk in these markets,” he told CNBC’s “Squawk Box Europe” on Friday.
Bilton referred to moves from Germany to reform borrowing rules and “reasonable” corporate profit expectations as more positive data points.
U.S. President Donald Trump’s tariffs could cause “a little bit more chop” to markets ahead of the duties coming into effect on April 2, Bilton said, adding that he expected more positive news to come on fiscal boosts and deregulation, which could provide a “boost” in the second half of 2025.
— Lucy Handley
‘Dramatic learning curve’: Expert on Heathrow shutdown
A police officer and firefighters at the North Hyde electrical substation which caught fire. More than 1,300 flights to and from Heathrow Airport will be disrupted on Friday due to the closure of the airport following the fire. Picture date: Friday March 21, 2025.
Aviation expert Anita Mendiratta said the implications of the fire and power outage causing the closure of London’s Heathrow Airport on Friday were “very wide.”
“The growth of the [aviation] industry is happening faster than the growth of infrastructure,” said Mendiratta, founder of consultancy AM&A, speaking to CNBC’s “Squawk Box Europe” on Friday. “All of this is a very dramatic learning curve,” she said.
Mendiratta described the growth of aviation globally as “massive.”
“It is extreme in terms of how it has grown far beyond even 2019 rates,” she said. This raises questions over the industry’s resilience to unplanned weather or geopolitical events and whether the surrounding infrastructure can support it.
— Lucy Handley
U.S stocks open lower
The three major averages traded lower in the U.S. Friday morning.
Just after the opening bell, the S&P 500 dropped 0.8%, and the Nasdaq Composite slid 1%. The Dow Jones Industrial Average also declined 321 points, or about 0.8%.
— Sean Conlon
Deutsche Bank revises growth forecasts for Germany after lawmakers pass fiscal reform
People shop and walk in the shopping streets in the city center of Munich, Bavaria, Upper Bavaria, Germany, on February 20, 2025.
In a note to clients after German lawmakers passed public borrowing reforms that will pave the way for higher national defense spending, economists at Deutsche Bank declared it “time to bake this fiscal regime shift into macro forecasts.”
The analysts now expect Germany’s GDP growth to accelerate to 1.5% in 2026 and 2.0% in 2027.
“That said, it will take time for the fiscal impulse to kick in, and we slightly lower our growth forecast for 2025 to 0.3% in light of stronger global cross-currents than we had previously expected,” they said.
The German lender had previously forecast German economic growth of 0.5% for 2025 and 1% for 2026.
— Chloe Taylor
Bank of Russia holds key rates at 21% as inflationary pressures persist
The Bank of Russia held its key rate unchanged at 21% on Friday, citing high inflationary pressures.
“The Bank of Russia estimates that the achieved tightness of monetary conditions creates the necessary prerequisites for returning inflation to the target in 2026,” it said in a statement on Friday. “Achieving the inflation target will require a long period of maintaining tight monetary conditions in the economy.”
The central bank’s board of directors noted that maintaining a long period of “tight monetary conditions in the economy,” will allow inflation to return to target in 2026.
“If disinflation dynamics do not ensure achieving the inflation target, the Bank of Russia will consider raising the key rate,” it said.
The central bank said Russia’s annual inflation was 10.2% as of March 17 and could slim down to 7-8% in 2025, before returning to 4% in 2026 and staying at this target further onward.
“According to the baseline scenario, the Bank of Russia expects that inflationary pressures will continue to decline in the coming months. This will be supported by a cooldown in lending and high saving activity,” it added.
Russia’s economy has been battling high inflation and economic constrictions as a result of Western sanctions, which have particularly curtailed Moscow’s key energy exports.
— Sawdah Bhaimiya
British pharma giant AstraZeneca to invest $2.5 billion in new China hub
British pharmaceutical giant AstraZeneca on Friday said that it will invest $2.5 billion in a research and development center in Chinese capital Beijing.
The new hub is expected to take AstraZeneca’s Beijing workforce to around 1,700 employees.
The investment in Beijing comes as part of a partnership with the city’s Municipal Government and the Beijing Economic-Technological Development Area Administrative Office, AstraZeneca said.
Under the deal, AstraZeneca will enter research and development collaborations with biotech firms Harbour BioMed and Syneron Bio and will launch a joint venture with BioKangtai to develop, produce, and market vaccines for respiratory and other infectious diseases.
— Chloe Taylor
Investors weigh financial cost and customer service in response to Heathrow fire, analyst says
Anita Mendiratta, founder of consultancy Anita Mendiratta and Associates, discusses the consequences of the fire at London Heathrow Airport.
Citi shares initial thoughts on Heathrow closure hit to IAG
Citi issued a note on Friday over the potential impact of the Heathrow airport closure on IAG, the owner of British Airways:
“1) the 2017 IT outage cost ~£80m, including £30m in lost revenue; however, we believe much of the cost was compensation – today’s fire would appear to be outside of the airline’s control, so compensation may not be payable (although they will need to provide food and water and possibly hotel accommodation),” Citi said in the note.
“2) it would appear to be one-off in nature, so we’d argue deserves a one times multiple (£80m is about 0.5% of market cap post tax; 3) if the airport does not open overnight, the costs would increase proportionally.”
— Sawdah Bhaimiya
Heathrow airport closure hits stocks
A fire at a nearby electrical substation caused the closure of Heathrow Airport on Friday, affecting hundreds of flights in and out of the London transport hub. Here are some of the biggest movers as of 8:45 a.m. London time:
— Katrina Bishop
Heathrow Airport closes after a nearby fire causes power outage, prompting major travel disruption
London’s Heathrow Airport closed on Friday after a fire at a nearby electrical substation caused a power outage, airport officials said.
“Heathrow is experiencing a significant power outage across the airport due to a large fire at a nearby electrical substation. Whilst fire crews are responding to the incident, we do not have clarity on when power may be reliably restored,” a Heathrow spokesperson said.
“We expect significant disruption over the coming days and passengers should not travel to the airport under any circumstances until the airport reopens,” the spokesperson said.
The airport will remain closed until at least 11:59 p.m. local time on Friday.
“We know this will be disappointing for passengers and we want to reassure that we are working as hard as possible to resolve the situation,” a Heathrow spokesperson said.
— Leslie Josephs, Monica Pitrelli
Opening calls
London’s FTSE 100 is expected to see little change at the open, according to IG, while Germany’s DAX index and the French CAC 40 are slated to shed 0.6% and 0.5%, respectively.
— Chloe Taylor
