European markets close higher after euro zone inflation data; Stoxx 600 up 6% for the month
This is CNBC's live blog covering European markets.
European markets closed higher on Wednesday to finish a strong month, as regional investors reacted to the latest inflation data from the euro zone in November.
The pan-European Stoxx 600 closed up 0.6%, totaling a monthly gain of around 6.1%.
Household goods added 2.3% to lead gains as almost all sectors and major bourses traded in positive territory. Chemicals bucked the trend, down 0.2%.
New data out Wednesday showed that euro zone inflation dropped by more than expected in November, fueling market hopes that record-high price growth across the bloc has peaked and the European Central Bank will begin slowing its interest rate hikes next month.
Elsewhere overnight, Asia-Pacific shares were mostly higher on Wednesday even as the reading for China's November factory activity fell short of expectations, dropping to the lowest reading since April.
Chinese health officials on Tuesday announced measures to boost vaccination among the elderly, an indicator seen as important for reopening the economy. When asked if recent unrest would lead to a shift in its zero-Covid policy, they said they were "closely watching the virus" for developments.
The Dow Jones Industrial Average fell Wednesday as Wall Street waded through new economic data and awaited an afternoon speech on the economy from Federal Reserve Chair Jerome Powell.
HSBC to close 114 UK branches and considers selling its New Zealand business
HSBC announced plans to close 114 of its U.K.-based branches as it tries to improve returns following criticism from a top investor.
The bank also announced the possible sale of its New Zealand business.
Retail banks are under increasing levels of pressure as banking moves online and low-cost challengers have joined the scene.
— Hannah Ward-Glenton
It's tricky to time ECB bond sales, chief economist says
Raphaël Gallardo, chief economist at Carmignac, said it is very tricky for the ECB to time when to sell European bonds.
Gallardo made the comments on CNBC's "Squawk Box Europe" Wednesday.
Stocks on the move: Argenx up 6%, Avanza down 6%
Shares of Dutch biopharmaceutical company Argenx climbed 6.7% by mid-afternoon to lead the Stoxx 600 after the company announced the acquisition of a U.S. Food and Drug Administration (FDA) Priority Review Voucher for $102 million.
At the bottom of the European blue chip index, Swedish bank Avanza fell more than 6% after suggesting the Riksbank's latest policy rate hike will not impact its net interest income positively.
- Elliot Smith
Europe market's short-term rally could be an opportunity to cut equity exposure, fund manager says
Maria Municchi of M&G Investments says the rally could be a "tactical opportunity to scale back from some of this equity exposure."
Julius Baer accepts £18 million fine by UK regulator over 'finder's fee arrangement'
Swiss private bank Julius Baer on Wednesday accepted an £18 million ($21.62 million) fine from the U.K.'s Financial Conduct Authority in relation to a "finder's-fee arrangement" for one of its clients between 2009 and 2014.
The regulator also announced Wednesday that it would also ban Gustavo Raitzin, former regional head for Bank Julius Baer (BJB), Thomas Seiler, former BJB sub-regional head for Russia and Eastern Europe, and Louise Whitestone, former relationship manager on Julius Baer International's Russian and Eastern European Desk.
The FCA's investigation concluded that JBI facilitated finder's fee arrangements between BJB and an employee of several Yukos Group companies, Dimitri Merinson.
"This was done on the understanding that the Yukos Group companies would then place large cash sums with Julius Baer from which Julius Baer could generate significant revenues," the FCA said.
"In particular, uncommercial FX transactions were made in which the Yukos Group companies were charged far higher than standard rates, with the profits being shared between Mr Merinson and Julius Baer."
FCA Executive Director of Enforcement and Oversight, Mark Steward, said there were "obvious signs that the relationships here corrupt, which senior individuals saw and ignored."
"These weaknesses create the circumstances in which financial crime of the most serious kind can flourish," Steward said.
In a statement, Julius Baer International said it "deeply regrets and apologises for the events and shortcomings that led to today's notice."
"We have taken full responsibility for these historical failings and made complete restitution to our client. Since this wrongdoing took place, we have implemented significant organisational changes," JBI CEO David Durlacher said.
- Elliot Smith
Euro zone inflation drops, fueling hopes of ECB rate hike slowdown
Euro zone inflation dropped by more than expected in November, fueling market hopes that record-high price growth across the bloc has peaked and the European Central Bank will begin slowing its interest rate hikes next month.
The consumer price index grew by 10% year-on-year, down from 10.6% in October and comfortably below a consensus projection of 10.4% in a Reuters poll of analysts.
However, food price inflation, a key worry for policymakers, continued to accelerate, with falling energy prices accounting for the bulk of the slowdown.
- Elliot Smith
UK will relax banking sector rules on retail and investment ringfencing, says minister
The U.K. is set to roll back some of the ringfencing rules that were imposed on banks in response to the Financial Crisis, City Minister Andrew Griffith told the Financial Times.
Since 2019, banks with more than £25 billion ($29.9 billion) in deposits have been required to formally separate their consumer operations from their investment banking arms, including holding separate pots of capital to protect against losses in each and having separate boards.
Lenders with limited U.K. trading activities such as Santander UK, Virgin Money and TSB Bank could soon be exempt from the measures, the FT reports, with proponents arguing this will make them more competitive.
Griffith said it would "make the U.K. a better place to be a bank," and "release some ... trapped capital over time."
The biggest investment banks, including HSBC and Barclays, would still be required to ringfence their operations to reduce risk to consumers from shocks in other parts of the business.
The government is promoting the reform as part of a package of measures to boost the U.K. financial sector.
— Jenni Reid
British business confidence drops in two surveys
A fall in British businesses' confidence was recorded in two surveys published Wednesday.
A gauge from bank Lloyds showed business confidence at its lowest level since February 2021 and below the long-term average.
It also found overall economic optimism fell for a sixth straight month and hiring intentions were at an 18-month low.
Wage expectations dipped slightly for businesses, but they said they would continue to target higher prices for their goods and services to offset higher operating costs.
Meanwhile, a survey of the services sector by the Confederation of British Industry found a decline in optimism for the third consecutive quarter. The fall was sharpest since May 2020, when the U.K. was in lockdown.
— Jenni Reid
Stocks on the move: SBB up 5%, Avanza down 7%
SBB shares climbed 5% in early trade to lead the Stoxx 600 after the Swedish real estate company agreed to sell a 49% stake in its educations unit to Brookfield for 9.2 billion Swedish krone ($870.42 million).
At the bottom of the European blue chip index, Swedish bank Avanza fell 7% after suggesting the Riksbank's latest policy rate hike will not impact its net interest income positively.
- Elliot Smith
French inflation slightly higher than expected in November
France was the first major European economy to report inflation data on Wednesday.
The French consumer price index rose by 0.4% month-on-month and 6.2% year-on-year, according to preliminary figures from statistics office INSEE, unchanged from October and slightly above projections of 0.3% monthly and 6.1% annually.
On an EU-harmonized basis, the annual rate was unchanged at 7.1% in November, in line with forecasts.
- Elliot Smith
CNBC Pro: Goldman Sachs' Currie says oil stocks are trading 'far below' their long-term trend
Goldman Sachs' Global Head of Commodities Research Jeff Currie told CNBC that historically, oil stocks have traded at a much higher premium to crude oil prices compared to current price levels.
For instance, the price gap between SPDR Oil & Gas ETF and ICE Brent Crude futures contract was about $66.60 on Tuesday. That's significantly lower than the $104 gap recorded at the start of January 2017, according to Koyfin data, as the chart below shows.
Currie told CNBC what he thinks could happen next to energy stocks.
CNBC Pro subscribers can read more here.
— Ganesh Rao
CNBC Pro: As Wall Street gets bearish, these stocks with margin growth could be safe bets
Wall Street pros are worried about the outlook for stocks, and are urging investors to stay defensive. These stocks with margin growth could be safe bets.
Pro subscribers can read more here.
— Zavier Ong
European markets: Here are the opening calls
European markets are heading for a positive open Monday morning.
The U.K.'s FTSE 100 index is expected to open 53 points higher at 7,458, Germany's DAX 154 points higher at 15,111, France's CAC up 68 points at 7,083 and Italy's FTSE MIB 197 points higher at 26,089, according to data from IG.
Germany's Ifo survey of current economic sentiment is released Monday.
— Holly Ellyatt