This is CNBC’s live blog covering European markets.
European equity markets were trading higher on Friday to cap a positive week for stocks.
Germany’s DAX was higher by 0.13% while France’s CAC 40 gained 0.7% at 1:30 p.m. London time. The U.K.’s FTSE 100 was the only major European index to trade lower, down by 0.35%.
Meanwhile, the pan-European Stoxx 600 index was in positive territory, up by 0.35%.
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Among the biggest gainers on Friday were shares of Burberry, which jumped 12% after the company reported 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 more than 9% 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.
Among the stocks falling was that of telecommunications equipment maker Ericsson. Shares of the company fell the most in the Stoxx Europe 600 index on Friday as the company missed estimates on both the top and bottom lines for the fourth quarter of 2024. The stock was trading down 9.4% at 11:30 a.m.
Overnight in Asia, stocks climbed higher after the S&P 500 hit a record high in Thursday’s trading session in the U.S. as President Donald 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.
‘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
