European markets bucked a global trend to end the Wednesday session higher.
The blue-chip Stoxx 600 index reversed the morning losses and provisionally closed up 0.53%, with most sectors higher. Construction stocks led gains, up by 1.8%. European banking stocks lost 0.6% after Barclays announced a 19% slide in annual net profit.
The U.K. FTSE 100 hit yet another record high, breaching the 8,000 points threshold for the first time and ending the session 0.55% higher on the day.
Despite relatively gloomy economic forecasts for the U.K. economy, a majority of FTSE 100 firms derive their revenue from overseas, and investors have been attracted to the energy, financial and commodities firms and dividend-paying defensives.
U.K. CPI data published Wednesday showed inflation fell for the third month in a row January to hit 10.1%, according to the Office for National Statistics, below Reuters economists' expectations near 10.3%.
Major bourses were even stronger, with France's CAC 40 up 1.2% and Germany's DAX up 0.8%.
Meanwhile, U.S. inflation grew slightly more than expected Tuesday, sending Asia-Pacific markets lower.
European markets close higher
Europe's Stoxx 600 index provisionally closed 0.53% higher Wednesday, despite declines in global markets.
France's CAC 40 index climbed 1.2% on the day, while Germany's DAX rose 0.8%.
The U.K.'s FTSE 100 closed 0.55% higher at 7997.83 points, after surpassing 8,000 points for the first time in its history during the session. U.K. inflation came in below expectations for January, fueling hopes that the Bank of England will not hike interest rates beyond market expectations.
— Jenni Reid
UK private equity activity to gain momentum: KPMG
U.K. private equity activity dropped by 16.5% last year, but conditions are ripe for a pick-up in 2023, analysts at KPMG UK said in a note shared exclusively with CNBC on Wednesday.
The number of deals involving private equity investors dropped from 1,850 in 2021 to 1,544 in 2022, KPMG research found. The value of deals declined 6%, from £180 billion ($216 billion) to £170 billion.
Mid-market private equity activity fell by nearly a fifth, from 843 deals to 680 deals.
Rob Baxter, KPMG UK's head of corporate finance, said it was perhaps inevitable the market would "begin to normalize" after 2021, which was a record year for M&A. The £46 billion of mid-market dealmaking in 2022 was still above the 2019 level of £41 billion.
Economic and geopolitical headwinds, rising inflation, high interest rates and the cost-of-living crisis will have prompted more caution amongst investors last year, Baxter said.
But he added the market was now "getting more positive by the day."
"With greater stability in the economy and signs that interest rates and inflation may have peaked, the direction of travel is clearer. Another good predictor of M&A activity is the stock market which has risen, so the building blocks may well be in place for a brighter second half of 2023."
Lenders and equity providers have significant capital to deploy but will be selective, honing in on resilient businesses in sectors with a "strategic imperative for change," he said. "Demand for lower-risk opportunities, such as bolt-ons and minority deals, and for businesses in robust sectors, will continue."
— Jenni Reid
U.S. stocks open lower after retail sales beat
Retail sales were strong in January, jumping 3% on the month where economists at Dow Jones anticipated a 1.9% increase. The number signals that the U.S. economy is holding up despite increased rate hikes by the Federal Reserve to tame inflation.
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Carrefour tops Stoxx 600 index on strong performance in France
Europe's largest food retailer Carrefour topped the pan-European Stoxx 600 index around 9.20 a.m. London time with a 8% increase in share price.
Carrefour announced a 800 million euro ($857 million) share buyback and increased dividends by 8% to 0.56 euros per share, Reuters reported.
France was "surprisingly strong" on topline and profitability, JPMorgan said, which combined with market share gains "should alleviate concerns around potential overpricing in the core market."
— Hannah Ward-Glenton
Barclays posts 19% slide in annual net profit after costly U.S. trading blunder
Barclays on Wednesday reported a full-year net profit of £5.023 billion ($6.07 billion) for 2022, beating consensus expectations of £4.95 billion but suffering a 19% fall from the previous year's restated £6.2 billion, partly as a result of a costly trading blunder in the U.S.
Fourth-quarter attributable profit was £1.04 billion, above analyst projections of £833.29 million but down 4% from the £1.08 billion posted in the fourth quarter of 2021.
The British lender took a substantial hit from an over-issuance of securities in the U.S., which resulted in litigation and conduct charges totaling £1.6 billion over the course of 2022.
Barclays shares dropped more than 8% in early trade.
— Elliot Smith
UK inflation rate falls lower than expected to 10.1%
The U.K. inflation rate dropped to 10.1% for January, down from 10.5% in December, according to data from the Office for National Statistics.
The rate is lower than Reuters economists' expectations of 10.3%.
Inflation has consistently fallen after hitting a 41-year high of 11.1% in October.
Full coverage of this story can be found here.
— Hannah Ward-Glenton
LVMH gives musician Pharrell Williams director role
Luxury behemoth LVMH announced musician Pharrell Williams as its new men's creative director Tuesday.
Williams collaborated with the conglomerate in 2004 and 2008 and has now taken on the role with immediate effect.
The musician's first collection for Louis Vuitton will be launched during Men's Fashion Week in Paris in June.
Shares of LVMH were 0.3% higher just after market open.
— Hannah Ward-Glenton
Here are the opening calls
European markets are expected to open lower across the board Wednesday. Britain's FTSE is down 10 points to 7,958, France's CAC is seen around 12 points lower to 7,218. Germany's DAX is set to open 42 points lower at 15,375 and Italy's MIB is expected to lose 26 points to 27,496.
— Hannah Ward-Glenton
Gold prices could rise above $2,000 by the end of 2023, says UBS
Gold prices could surpass $2,000 by the end of the year amid a weakening U.S. dollar, UBS Global Wealth Management's commodity, rates, and FX analyst Wayne Gordon said.
"We think that the dollar is on a trend weakness now as we go forward into 2024. And in that context, gold has been and will continue to be a very good hedge against that dollar weakness," Gordon told CNBC's "Squawk Box Asia" on Wednesday.
To push gold to "new record levels" of $2,100 and above, the U.S. Federal Reserve needs to start cutting interest rates, he said, adding that the Fed could turn dovish in the third quarter and cut rates by year-end.
Gold prices stood at $1,856.30 during Asia's afternoon trading session.
— Charmaine Jacob
Fortescue shares fall after company reports lower half-year profit, dividends
Meanwhile, the company said it expects solid iron ore demand this year from China.
Net profit after tax came in at $2.36 million, 15% lower than the $2.78 million recorded in the same period a year ago.
Dividends also fell to 76 Australian cents, down 13% compared to the 85 Australian cents paid out for the June - December 2021 period.
— Lim Hui Jie