This was CNBC’s live blog covering European markets.
European equity markets slipped into the red in late deals Friday despite a largely positive week for global stocks.
France’s CAC 40 index held onto gains of 0.44%, but Germany’s DAX and the U.K.’s FTSE 100 fell 0.08% and 0.73% respectively.
The pan-European Stoxx 600 index closed with a 0.05% loss. However, the regional gauge still gained more than 1% this week, buoyed by solid earnings and optimism around U.S. growth after President Donald Trump was sworn-in to the White House.
Among the stocks in decline was telecommunications equipment maker Ericsson, which fell more than 12% after the company missed estimates on both the top and bottom lines for the fourth quarter of 2024.
Key posts:
Among the biggest gainers on Friday was Burberry, which jumped 10% on a shallower-than-expected dip in sales in the fiscal third quarter. Other luxury stocks including Moncler, Swatch and Christian Dior were also trading higher.
Novo Nordisk shares also rose by 7% after the company said a new clinical trial result showed that one of its treatments led to a weight loss of 22% among people living with obesity.
The S&P 500 hit a fresh record high Friday following a record close in the previous trading session, as President Trump called for lower interest rates and cheaper oil prices.
Speaking via video to an assembly of global leaders at the World Economic Forum in Davos, Switzerland, the new president in a wide-ranging policy speech did not mention the Federal Reserve by name but made clear he would seek lower rates.
“I’ll demand that interest rates drop immediately,” Trump said. “And likewise, they should be dropping all over the world. Interest rates should follow us all over.”
The Bank of Japan raised the policy rate by 25 basis points to 0.5% — the highest since 2008 and in line with economists’ expectations. Following the decision, the Japanese yen weakened marginally to trade at 155.18 against the dollar.
Investors are also likely to be looking ahead to the Fed’s FOMC meeting on Wednesday with no change expected to interest rates. Elsewhere in China, equity markets will be closed from Tuesday for the Lunar New Year holiday.
— CNBC’s Amala Balakrishner contributed to this European markets update.
Europe shares close slightly lower
European markets were mixed Friday, with the Stoxx 600 index ending the session 0.05% below the flatline as momentum stalled at the end of a strong week.
Autos stocks led sector gains, up 1.16%, while telecoms dropped 2.8%.
— Jenni Reid
Diageo up 4% after Bloomberg reports drinks giant is reviewing portfolio
Diageo shares were 4% higher at 4 p.m. London time Friday, slightly extending gains from earlier in the morning after Bloomberg reported that the company is reviewing its portfolio in a bid to revive growth, and could consider a spinoff or sale of its Guinness brand.
Bloomberg also reported that the company is reviewing its 34% stake in LVMH‘s drinks unit Moet Hennessy, citing people familiar with the matter. The report states that no decisions have been taken and that no deals are guaranteed.
A Diageo spokesperson told CNBC the company does not “comment on market rumour.”
The drinks giant, which also owns brands including Johnnie Walker, Captain Morgan and Smirnoff, has been grappling with a slowdown in sales and weak U.S. demand. Irish stout Guinness has emerged as a star growth area, boosted by popularity among younger drinkers.
— Jenni Reid
S&P 500 opens little changed
The S&P 500 kicked off Friday’s session near flat. The Dow Jones Industrial Average shed about 0.1% slightly after 9:30 a.m. ET, while the Nasdaq Composite gained 0.1%.
— Alex Harring
Europe’s luxury sector remains attractive, says J Stern’s Rossbach as Burberry pops
Chris Rossbach, chief investor officer at J Stern & Co, says Europe’s luxury sector remains attractive after Burberry shares jumped on better-than-expected quarterly sales.
‘Limited chances of success’ for Monte dei Paschi and Mediobanca deal, analyst says
KBW analysts Hugo Cruz and Ben Maher said there are limited chances of success for Banca Monte dei Paschi’s (BMPS) 13-billion-euro offer to merge with Mediobanca.
This is despite BMPS CEO Luigi Lovaglio saying the deal with Mediobanca was the “best fit at the best time for a powerful business combination.”
“We think the synergy potential is limited, even including the acceleration of DTA usage for BMPS, and with BMPS trading at lower P/Es than MB our first impression is that this offer has limited chances of success,” said the KBW analysts in a Friday note to clients.
BMPS shares were trading down by nearly 8% while Mediobanca’s stock was up by more than 5% at 11 a.m. London time.
— Ganesh Rao
Novo Nordisk shares soar after new treatment shows 22% weight loss
Novo Nordisk shares have risen by more than 9% after the company said a new clinical trial result showed that one of its new treatments led to a weight loss of 22% among people living with overweight and obesity.
The maker of the weight loss drug Wegovy said the phase 1b/2a clinical trial of amycretin, which is similar to Wegovy but also targets the hormone called amylin that affects hunger, saw 125 people with an average weight of 93 kilograms lose up to 22% of their body weight over 36 weeks.
The company added that those given the placebo treatment added up to 2% in weight over the same period.
“The results seen in the trial support the weight lowering potential of this novel unimolecular GLP-1 and amylin receptor agonist, amycretin, that we have previously seen with the oral formulation,” said Martin Lange, executive vice president for development at Novo Nordisk.
Amycretin has previously had clinical trials for use as an oral pill.
— Ganesh Rao
Rolls-Royce wins $11 billion nuclear reactor contract
The U.K. government has handed London-listed Rolls-Royce a £9 billion ($11.2 billion) contract to make and maintain its nuclear reactors used in submarines.
Shares in the company shot up by 2% in early trade, marking a 52-week high for the stock, but were trading up 0.13% at 9:45 a.m. London time.
The contract award, which is expected to run over the next eight years, was previously expected and did not add to Rolls Royce’s revenues. However, it helps extend the visibility of the company’s earnings for many years ahead, according to JPMorgan equity analysts.
“The contract is the first of its kind awarded by the UK MoD and is the culmination of years of planning between Rolls-Royce and UK MoD, potentially creating a new way of doing business between Government and industry. It signposts the UK’s commitment to the continuous at sea nuclear deterrent and Rolls-Royce’s continuing dedication to the UK Royal Navy and the Defence Nuclear Enterprise.”
— Ganesh Rao
Ericsson shares tank on missed sales and profit figures
Shares of telecommunications equipment maker Ericsson fell the most in the Stoxx Europe 600 index on Friday as the company missed estimates on both the top and bottom line for the fourth quarter of 2024.
The stock was trading down by 8.4% at 9.15 a.m.
The company reported sales of 72.91 billion Swedish kroner ($6.7 billion), below the 73.06 billion expected by analysts, according to FactSet. Ericsson’s adjusted profits were 9.59 billion Swedish kroner, undershooting expectations of 10.44 billion.
“We are not yet at our long-term [adjusted profit] goal, but we are progressing towards it, supported by our strategic actions,” said Börje Ekholm, chief executive of Ericsson, in a statement.
— Ganesh Rao
Burberry shares gain after quarterly report
Shares of Burberry jumped 14% on Friday after the company reported a shallower-than-expected dip in sales in the fiscal third quarter, providing a first glimpse of CEO Joshua Schulman’s efforts to revamp the beleaguered British fashion house.
Comparable sales declined 4% in the three months to December. Analysts had anticipated a 12% decrease in a company-compiled consensus estimate.
Shares were last seen up 14.29% by 8:20 a.m. London time.
Monte dei Paschi di Siena offers to buy rival Mediobanca
Italian lender Banca Monte dei Paschi di Siena has made an offer to buy competitor Mediobanca in a 13.3 billion euro ($13.9 billion) deal.
Monte dei Paschi di Siena (MPS), considered the world’s oldest continuously running bank, said it was valuing its rival at 15.992 euros per share, and hopes to complete the offer by the third quarter of this year.
In the offer, MPS said it would find 700 million euros in pre-tax savings. It also highlighted the multi-billion tax losses from previous years the new combined entity will be using to minimize its tax bills.
“The new Group will indeed be able to accelerate the usage of Euro 2.9 billion [deffered tax allowance] over the next six years, or c. Euro 0.5 billion per year, generating a material benefit capital wise,” MPS said in a statement.
MPS is also expecting to see one-time costs of 600 million euros to integrate the two entities if Mediobanca shareholders accept the offer.
The offer would be the third active deal currently in progress in the Italian financial sector, which includes UniCredit‘s offer to buy Banco BPM and Banco BPM’s offer to buy fund manager Anima Holding.
— Ganesh Rao
