This was CNBC’s live blog covering European markets.
European markets were mixed on Wednesday, as investors reacted to a historic policy reform in Germany and developments on a ceasefire in Ukraine, while awaiting key monetary policy updates.
The pan-European Stoxx 600 index closed 0.19% higher, as sectors and major bourses diverged. Germany’s DAX snapped a three-day winning streak to end 0.4% lower, as defense firms including Rheinmetall and Hensoldt — strong performers this month — declined.
It comes after German lawmakers voted on Tuesday to reform the country’s so-called debt brake rule, which will allow a greater national spend on defense and permit the creation of a 500 billion euro ($546 billion) climate and infrastructure fund.
Traders are also monitoring news that U.S. President Donald Trump and Russian leader Vladimir Putin agreed on Tuesday to taking steps toward a ceasefire in Ukraine. Trump on Wednesday said he also had a “very good” call with Ukrainian President Volodymyr Zelenskyy.
Global investors are also awaiting the latest monetary policy updates from the U.S. Federal Reserve and the Bank of England.
The Fed is not expected to make any changes to its key interest rate when it meets on Wednesday.
The Bank of England, whose Monetary Policy Committee will convene on Thursday, is also widely expected to hold its key interest rate steady at 4.5%, amid signs of a slowdown in the U.K. economy.
Across the Atlantic, stocks edged higher Wednesday morning as traders awaited the update from the Fed. That came after U.S. shares saw a widespread selloff in Tuesday’s session.
Overnight in Asia, markets traded mixed following Tuesday’s Wall Street sell-off.
Europe stocks close higher
European markets closed broadly higher on Wednesday, with the Stoxx 600 provisionally gaining 0.26% for its fourth straight session in the green.
Positive momentum was driven by France’s CAC 40 index, up 0.7%, while the U.K.’s FTSE 100 was near-flat and Germany’s DAX fell 0.34%, paring earlier steeper losses.
— Jenni Reid
No guarantee that European stocks will keep outperforming the U.S. market, strategist says
Lindsay James, investment strategist at Quilter Investors, discusses the outlooks for Europe and the U.S. and why fundamentals still benefit the latter.
Turkish stock ETF plunges after Erdogan rival’s arrest
An exchange traded fund that tracks Turkish stocks plummeted Wednesday following the arrest of President Recep Tayyip Erdogan political rival Ekrem Imamoglu.
The iShares MSCI Turkey ETF (TUR) was last down 11.4%. That puts in on track for its worst day since Dec. 17, 2021, when it shed 14%.
— Fred Imbert
U.S. Stocks open higher ahead of Fed decision
Stocks started off Wednesday’s trading session in the green.
The S&P 500 gained 0.3%, while the Nasdaq Composite jumped 0.5%. The Dow Jones Industrial Average also rose 85 points, or 0.2%.
— Sean Conlon
70 Spanish entities are against BBVA Sabadell merger, says Banco Sabadell CEO
César González-Bueno, CEO of Banco Sabadell, discusses the ongoing negotiations of a potential takeover by Spanish rival BBVA.
— Sawdah Bhaimiya
German defense names fall day after spending package approved by parliament
German defense stocks were lower in mid-morning trade, a day after the country’s parliament approved a landmark fiscal package that will allow higher government defense and infrastructure spending.
Rheinmetall, one of the top performers on the Stoxx 600 on Tuesday, was down 6.3% at 10:40 a.m. in London. Renk Group and Hensoldt were 10% and 8.5% lower, respectively.
Defense names have been on a strong run this year on expectations of security spending boosts across the region.
“It’s going to be some time before we see contracts coming through and the implications from a corporate profitability perspective of the package that’s been put through in Germany,” Lindsay James, investment strategist at Quilter Investors, told CNBC’s “Squawk Box Europe” on Wednesday.
— Jenni Reid
BBVA moves closer to hostile takeover of Banco Sabadell
Spanish lender BBVA said Wednesday that Morocco’s central bank had approved an indirect change in control of the country’s Banco Sabadell branch, as a part of BBVA’s hostile takeover bid for its domestic peer.
BBVA said the greenlight from the Central Bank of Morocco meant it now had “all the authorizations needed from international regulators to complete the transaction.”
BBVA CEO Onur Genҫ said the bank now only needed approval from the Spanish Competition Authority, which has conducted investigations into the impact the merger could have on the domestic market.
“We have presented an unprecedented list of remedies, basically giving volume guarantees and price guarantees — guaranteeing the price of loans in certain geographies for certain segments,” he said. “Based on those remedies, our expectation is that they will give us light in the next few weeks.”
Genҫ said that if the regulator does approve the takeover, the government can choose to review the case, paving the way for Banco Sabadell shareholders — who he dubbed “the rightful owners of the decision” — to decide whether to tender their shares.
BBVA first made a merger offer for its domestic peer last April — a bid that Sabadell has publicly opposed, with its CEO César González-Bueno telling CNBC last month that “competition would suffer” if the bank is absorbed by BBVA.
“On top of that, they are not paying the price,” he said at the time. “With everything that it’s on the table, the answer is a very, very clear ‘No.'”
— Chloe Taylor
German stocks fall
Germany’s DAX index was around 0.2% lower by 9:34 a.m. in London, putting it on track to end a three-day winning streak.
It came after lawmakers voted to reform public borrowing rules, paving the way for increased national defense spending.
Vonovia, down 2%, and Brenntag, which shed 1.7% during early trade, were among the biggest losers on the DAX.
The MDAX index — home to 50 German midcap companies — also moved lower on Wednesday morning, shedding 0.3%.
Traton and Hypoport sustained the MDAX’s biggest losses, down 4.6% and 3.8% respectively.
— Chloe Taylor
Rio Tinto urges shareholders to reject Palliser Capital’s unification push
A Rio Tinto worker looks at a ship that is loaded with bauxite, the raw material for aluminum, at Rio Tinto’s Weipa operations in Cape York, on the north-eastern tip of Australia March 7, 2019.
Rio Tinto has called on its shareholders to reject hedge fund Palliser Capital’s ongoing push for a unification of the dual-listed mining giant.
The firm currently operates under a dual listed companies (DLC) structure, and it is divided into Rio Tinto PLC — traded on the London Stock Exchange — and Rio Tinto Limited — listed on the Australian Securities Exchange. The two companies’ boards of directors are made up of the same individuals.
On Wednesday, Rio Tinto said London-based Palliser Capital — a major shareholder in the company — had requisitioned a directive for the formation a committee of independent directors, to examine whether unifying the firm into a single Australian holding company would be in shareholders’ best interests.
Rio Tinto’s board urged shareholders to reject the motion at its annual general meetings in April and May.
“The Board has already conducted a robust and comprehensive review of a unification of the DLC with five leading external advisers, the conclusions of which are clear,” it said in a statement on Wednesday. “A unification of the DLC would be value destructive for the Group and its shareholders.”
Toward the end of 2024, Palliser wrote to Rio Tinto’s board of directors to call for the unification of the DLC into a single Australian domiciled holding company.
It argued at the time that the DLC structure had destroyed around $50 billion in shareholder value since Rio Tinto became dual listed three decades ago. In the Wednesday statement, Rio Tinto labeled assertions about $50 billion of value erosion “both unfounded and misleading.”
Shares of Rio Tinto were 1% lower at 9:30 a.m. London time.
— Chloe Taylor
Bank of England expected to keep rates on hold
Andrew Bailey, Governor of the Bank Of England, pauses before the start of the Monetary Policy Report press conference at the Bank Of England on February 6, 2025 in London, England.
The Bank of England is widely expected to hold interest rates when it meets on Thursday, as the U.K. faces economic headwinds both at home and abroad.
The central bank is highly likely to keep its benchmark interest rate at 4.5% at its March meeting, given the unpredictability of President Donald Trump’s trade tariffs and a fledgling global trade war, and how those factors could affect inflation in the U.K.
— Holly Ellyatt
Santander says 750 jobs at risk as it pursues UK branch closures
A sign hangs from a branch of Banco Santander in London, U.K., on Wednesday, Feb. 3, 2010.
The British unit of Spanish lender Santander on Wednesday said 750 of its staff were at risk of redundancy as it targets 95 branch closures in the U.K.
— Ruxandra Iordache
Opening calls
London’s FTSE 100 is expected to be little changed at the open, according to IG, while the French CAC 40 is expected to shed 0.2% and the German DAX is slated to open around 0.5% lower.
A downward move in the DAX — home to Germany’s biggest companies — would end three consecutive days of gains for the index, which has added 17.4% since the beginning of the year.
— Chloe Taylor
