European stocks rise as UK PM resigns
European markets reversed early losses to end the day up 0.25%, a day that saw political turmoil in the UK culminate with the Prime Minister’s resignation.
Britain’s FTSE 100 closed 0.27% higher and the pound gained about 0.7% against the dollar.
The French CAC 40 closed up 0.7% and the German DAX index rose 0.2%.
Dutch company To be a semiconductor led stock gains, up 15% despite warnings of an industry slowdown. Meanwhile Ericsson and nokia slipped 14% and 7.5%, respectively, after two analysts missed earnings forecasts.
—Jenni Reid
Stocks in motion: Besi up, Ericsson and Nokia down
Dutch semiconductor company Besi was the best performer among European equities, rising 13% despite falling net profit for the first nine months of the year and warnings of “further industry downturn”.
At the other end of the index, the Swedish telecommunications company Ericsson fell 15% after reporting lower earnings and missing analyst forecasts. nokia fell 7% after also failing to meet earnings guidance.
—Jenni Reid
Sterling is buoyant and gilt yields fall as UK Prime Minister Liz Truss resigns
The British pound is up 0.5% to trade at around $1.1214 in the early afternoon following the resignation of Liz Truss as British Prime Minister. Government bonds also reacted positively to the news, with 10-year gilt yields falling four basis points to 3.842%.
—Hannah Ward-Glenton
British Prime Minister Liz Truss resigns
Liz Truss has announced she is stepping down as UK Prime Minister because she was elected “with a mandate to change” but was unable to “return that mandate”.
Read the full story here.
—Hannah Ward-Glenton
Sterling rallies as British Prime Minister Liz Truss prepares to speak outside Downing Street
Market bets on rate hikes would hurt economy, BoE deputy governor says
Bank of England Deputy Governor Ben Broadbent told investors that betting on big interest rate hikes would deal a “pretty big” blow to the economy.
Broadbent said it was unclear how the UK government’s new energy price cap plan would affect medium-term inflationary pressure, after new finance minister Jeremy Hunt scaled back initial plans .
—Hannah Ward-Glenton
German producer prices above market expectations
Germany’s Federal Statistical Office said on Thursday morning that producer prices in the country rose 45.8% a year in September.
Economists had expected a figure of 44.7%, according to Reuters. This adds to fears that broader inflation figures will continue to rise over the coming months.
—Matt Clinch
Nordic telecoms plunge: Ericsson down 12%, Nokia down 5%
Ericsson shares fell 12% after third-quarter results, while Nokia fell 5% in early trading.
Both companies’ operating margins have been hurt by rising costs and contract delays.
—Hannah Ward-Glenton
European markets: here are the opening calls
European markets are heading for a negative open on Thursday as investors assess lingering economic uncertainty.
Britain’s FTSE index is expected to open down 37 points to 6,899, Germany’s DAX down 106 points to 12,635 and France’s CAC down 52 points to 5,988, according to IG data.
Regional markets closed slightly lower on Wednesday afternoon as traders digested fresh inflation data for the UK and assessed rate hike expectations and recession fears.
The UK reported the consumer price index rose 10.1% on Wednesday, matching the 40-year high posted by the Office for National Statistics in July. Food, energy and transport prices were behind the rise.
On the data front in Europe, business climate data in France for October is expected. Revenues are owed by Hermès, Kering, L’Oréal, Pernod Ricard, Vivendi, Akzonobel, ABB, Nokia and Volvo Group.
—Holly Ellyatt
CNBC Pro: Chip stocks have been down all year – but one looks ‘really attractive,’ fund manager says
Semiconductor stocks have been beaten this year, but investors with a longer-term view of the importance of chips to secular trends such as 5G, electrification and artificial intelligence could look to buy the decrease.
Hedge fund manager David Neuhauser shares a chip stock he likes.
Pro subscribers can learn more here.
— Zavier Ong
Sterling extends losses as UK Prime Minister Liz Truss addresses Parliament
UK markets now come with a ‘skill risk premium’, economist says
The past two weeks have put a “skill risk premium” on financial markets, Paul Donovan, chief economist at UBS Wealth Management, told CNBC’s “Squawk Box Europe.”
“Financial markets judged that the British government was not as competent as it could have been,” Donovan said.
CNBC Pro: Hedging Bonds Before a Recession? BlackRock says it’s an “obsolete” playbook
Recession fears are stirring markets, but the typical playbook of hedging in sovereign bonds is “outdated”, says BlackRock.
“In this environment, the bond vigilantes are back and heralding the return of the term premium,” BlackRock said, adding that it was underweight government bonds.
The asset manager says investors can still buy other types of bonds, however.
CNBC Pro subscribers can learn more here.
—Weizhen Tan