This was CNBC’s live blog covering European markets.
European markets closed in positive territory on Friday with London’s FTSE 100 ending the session at a record high.
The pan-European Stoxx 600 index ended Friday 0.68% higher, with nearly all sectors and all major bourses in the green. Mining stocks led the gains, with the sector up 2% after Bloomberg reported Glencore had been in talks with Rio Tinto to explore the industry’s largest ever merger. Novo Nordisk was the one of biggest detractors sliding by 4.3%.
The U.K.’s mining-heavy FTSE 100 index strengthened provisionally by 1.35% to surpass a record close above 8,500 points.
The rise came even as investors assessed disappointing U.K. data on Friday, with the ONS estimating December retail sales fell 0.3% on a month-on-month basis. Economists polled by Reuters had anticipated a 0.4% rise in sales volumes from the previous month.
Earlier in the week, U.K. economic growth figures for November came in weaker than expected, while inflation eased more than anticipated to 2.5%.
The combination of all three led traders to add to bets on the extend of Bank of England interest rate cuts this year, with more than 70 basis points in trims priced in by late morning, up from around 65 basis points the previous day.
That in turn placed pressure on the British pound, which was 0.3% lower against the U.S. dollar, but helped with a recent cooling of U.K. borrowing costs, which were broadly lower Friday after spiking to decade-highs last week.
Analysts at Deutsche Bank noted Thursday that U.S. inflation — which this week also came in lower than expected — mattered “just as much if not more” for U.K. assets than domestic inflation.
The FTSE 100 in particular is known for its high proportion of international companies reliant on foreign earnings, with weak U.K. demand having a bigger drag on the FTSE 250 index, which traded just 0.25% higher Friday.
Overnight in Asia, stocks were mixed as investors reacted to China’s fourth-quarter GDP update, which came in above expectations.
On Wall Street, stock futures edged higher, with indexes poised to end the week higher despite some volatility in recent days.
— CNBC’s Lisa Kailai Han and Lee Ying Shan contributed to this European markets update.
London’s FTSE 100 closes at a record high
European stock markets had their best week in many months, with London’s FTSE 100 reaching a record high.
The FTSE 100 provisionally closed at 8,505.22 Friday, up more than 3% for the week. Its previous high of 8,445.80 was reached on May 15, 2024.
The Stoxx Europe 600 index also ended the week up nearly 2.4%, its best performing weekly gain since the end of September 2024.
The more than 3% gain for both Germany’s DAX and France’s CAC 40 this week means they have outperformed the S&P 500 so far this year.
— Ganesh Rao
JPMorgan: Price cuts for Novo drugs as expected
Novo Nordisk shares have pared some losses but are on course for a 3.5% fall for the day after the U.S. government announced it intends to negotiate pricing over the company’s blockbuster weight loss and diabetes drugs.
JPMorgan analysts said they had previously forecast a 50% cut in prices for the majority of the drugs on Medicare’s negotiation list, and the announcement today wasn’t a surprise. Final negotiated prices are expected to be announced by Nov. 1.
“Overall, we see the announcement today as in line, given the second list of price negotiation eligible drugs is in line with our expectations,” the bank’s analysts said.
— Ganesh Rao
U.S. stocks open higher Friday
U.S. stocks opened higher on Friday and are on course to notch their first weekly gain of the new year.
The Dow Jones Industrial Average and the S&P 500 gained 0.8%, while the Nasdaq Composite advanced 1.2%.
Big tech stocks were also higher on the day, with shares of Tesla popping 3%. Chipmaking giant Nvidia jumped 2%, while Meta Platforms and Alphabet shares added more than 1% each.
— Ganesh Rao
Novo Nordisk shares slip further as Ozempic joins Medicare price negotiations
Novo Nordisk shares extended losses to trade 4.6% lower at 1:40 p.m. in London, after the outgoing administration of U.S. Joe Biden announced 15 prescription drugs — including the Danish pharma giant’s Ozempic and Wegovy — would be subject to price negotiations between manufacturers and Medicare.
Novo Nordisk diabetes pill Rybelsus is also subject to the talks, as it shares the active ingredient semaglutide.
— Jenni Reid, Annika Kim Constantino
Novo Nordisk shares lower on higher dose obesity drug results
SEIZED OZEMPIC, WEGOVY AND OTHER WEIGHT LOSS DRUGS AT JFK AIRPORT’S INTERNATIONAL MAIL FACILITY.
Shares of Novo Nordisk were down 2% shortly after the company announced late-stage trial results of a high dose version of its blockbuster Wegovy obesity drug.
The “Step Up” trial results showed a 7.2 milligram dose of the drug’s active ingredient semaglutide helped overweight patients lower their weight by an average of 20.7% over 72 weeks.
That compares to an average weight loss of 17.5% for patients on 2.4 milligrams of semaglutide, the highest dose currently available.
Shares had been trading down 3% before the announcement. They were last down 2.3% at 1:00 p.m. London time.
— Karen Gilchrist
European shipping stocks decline
Shares of Hapag-Lloyd had fallen by more than 3% earlier in the day, Maersk was down nearly 5% as of 1 p.m. London time.
The moves come after analysts at JPMorgan and Barclays suggested an Israeli-Gaza ceasefire is likely to remove barriers for ships to re-enter the Red Sea and add freight capacity to an existing glut in the sector.
International shipping firms have avoided the Red Sea as Houthi rebels in Yemen, who are allied with Palestinian militant groups in Gaza, have repeatedly attacked vessels perceived to be linked to Israel. This has led to ships re-routing around the horn of Africa, which has added multiple days — as well as costs — to journeys between Asia and Europe.
The changes in transit routes will now shorten journey lengths and add capacity to the shipping sector at a time of glut. Logistics firms placed orders for new ships during Covid-19, which are currently being delivered.
“We are cautious on the container shipping lines given significant oversupply, masked currently by temporary effects, while the orderbook keeps building … and rising demand risks given the sensitivity of global GDP to increasing trade protectionist measures,” JPMorgan analysts said in a research note Friday.
The Wall Street bank expects container shipping costs to fall a further 15% this year and tumble a whopping 50% again in 2026 due to the supply-demand imbalance. The bank’s analysts forecast shares of Hapag-Lloyd and ZIM Integrated Shipping Services to fall 40% and Maersk to decline by about 15% over the next 12 months.
“Negotiations for a ceasefire and the Red sea reopening remain the key negative catalyst for the industry. We remain negative on mid-term overcapacity risk once the Red Sea re-opens,” Barclays strategists said on Jan. 15.
— Ganesh Rao
Avolta shares rise after buyback announcement
World Duty Free shop, Stansted airport, U.K.
Shares of Swiss travel retailer Avolta rose to the top of the Stoxx 600 on Friday, with the stock gaining 7.7% by 9:55 a.m. London time.
That came after the company announced a share buyback of up to 200 million Swiss francs ($219 million), with the buyback program slated to begin by the end of the month and reach completion before the year is over.
CEO Xavier Rossinyol said in a statement on Friday that the share buyback reflected Avolta’s “strong balance sheet, financial performance and confidence in its future cash generation.”
— Chloe Taylor
UK borrowing costs fall
British government borrowing costs fell on Friday following more disappointing economic data out of the country.
The yields on gilts — U.K. government bonds — fell across the board, with the yield on the 10-year gilt falling by four basis points at 9:02 a.m. London time.
U.K. borrowing costs rose to multi-year highs in recent weeks as investors weighed the economic outlook for the country.
U.K. GDP and retail sales data released this week came in below expectations, despite figures showing the British economy returned to growth in November after two consecutive month-on-month contractions.
The slew of disappointing data prints has raised hopes that the Bank of England will resume interest rate cuts at its next monetary policy meeting in February.
— Chloe Taylor
Mining stocks lead gains
Europe’s mining stocks led the gains during early morning deals, up 1.2%, as investors monitored reports of prospective merger talks between Rio Tinto and Glencore.
Antofagasta, Anglo American and Glencore were all trading more than 2% higher shortly after the opening bell.
It comes shortly after Bloomberg News on Thursday reported that Rio Tinto and Glencore were in early-stage merger talks. Both companies declined to comment on the news when contacted by CNBC.
A tie-up between the two companies would create the world’s largest mining firm by market value.
— Sam Meredith
British pound declines
The British pound fell 0.5% against the dollar on Friday morning, trading at $1.21676 at 7:49 a.m. London time.
The decline of the British currency came after official data showed U.K. retail sales had fallen 0.3% in December on a monthly basis.
— Chloe Taylor
UK retail sales fall
Retail sales in the U.K. fell by 0.3% in December on the month, according to an estimate published Friday by the country’s Office for National Statistics (ONS). On an annual basis, retail sales were up 3.6%, the ONS said, following a “large fall” in December 2023.
The new figures meant sales volumes for the fourth quarter of the year were down 0.8% from the previous three-month period.
— Chloe Taylor
Here are the opening calls
London’s FTSE 100 is expected to open 130 points higher at 8,431, according to IG, while the German DAX index is slated to 6 points higher to open at 20,662. France’s CAC 40 is expected to open 173 points up at 7,648, IG’s figures predict.
— Chloe Taylor
