European stocks close lower; Bank of England joins Fed in hiking rates despite volatility

Paolo Ardoino, CTO of Tether, discusses with CNBC's Arjun Kharpal why bitcoin has rallied this year and where he sees the cryptocurrency going.

Norges Bank Governor Ida Wolden Bache told CNBC there is "considerable uncertainty about the economic outlook" as she discussed Norway's central bank hiking interest rates.

German software provider Nemetschek extended its gains to 15.2% in afternoon trading after topping the Stoxx 600 index earlier in the day.

Nemetschek published positive earnings results Thursday morning.

— Hannah Ward-Glenton

U.S. stocks opened higher Thursday as investors bet the Federal Reserve is done with interest rate hikes.

The Dow Jones Industrial Average added 194 points, or 0.60%. The S&P 500 rose 0.8%, and the Nasdaq Composite advanced by 1.3%.

— Hakyung Kim

Europe's Stoxx 600 index and the U.K. FTSE 100 slightly trimmed losses following the Bank of England's widely-expected 25 basis point rate hike, but remained 0.45% and 0.7% lower, respectively.

Germany's DAX and France's CAC 40 were both down around 0.25%.

U.K. inflation came in hotter-than-expected on Wednesday, though some analysts have said this was due to exceptional incidents such as a fresh vegetable shortage and that energy prices are down on average versus last year.

— Jenni Reid

It's "extremely important" that UBS' takeover of Credit Suisse be finalized "smoothly," Swiss National Bank Chairman Thomas Jordan told CNBC.

"It's important for financial stability," Jordan added, having said that maintaining price stability is the "main goal" of the bank.

When asked whether banking funding costs would go up in Switzerland as a result of the recent AT1 bonds wipeout, Jordan told CNBC's Joumanna Bercetche that "we will see whether this is true or not" but said he believed it would have "limited impact."

On the bank's decision to raise its benchmark interest rate by 50 basis points to 1.5%, Jordan said further hikes could be in the cards depending on the economic outlook.

"We will stop [hiking] when we have ensured price stability in Switzerland, and that does not depend really on the decisions of other central banks," Jordan said.

The Bank of England opted to raise its policy rate by 25 basis points to 4.25% Thursday, while Norway's central bank hiked rates by 25 basis points to 3% on the same day.

— Hannah Ward-Glenton

The British pound extended gains from the previous two sessions against the dollar and was trading up 0.2% at $1.2288 at 11:30 a.m. in London.

The Bank of England is due to announce its latest interest rate decision, with a 25 basis point hike fully priced in.

Markets "will therefore look for some indications that the further 40 [basis points] currently embedded in the GBP [overnight indexed swap] curve is warranted," analysts at ING said in a note, though they may not find much guidance on future policy.

"Ultimately, the pound may rapidly default to being driven by external factors: primarily the banking situation and global risk sentiment. A test of 1.25 in cable in the coming days is looking quite likely," they said.

— Jenni Reid

Swiss National Bank chairman Thomas Jordan said the bank's focus is on "stability" after the collapse of Credit Suisse and the subsequent UBS takeover.

"The focus has to be ... ensuring that we can maintain financial stability under all circumstances and that the closing of the deal will be smooth and fast," Jordan said in response to a question from CNBC's Joumanna Bercetche.

The Swiss central bank has offered to supply up to 50 billion Swiss francs ($53.68 billion) to Credit Suisse under a covered loan facility and a short-term liquidity facility.

Shares of Credit Suisse were down 3.9% mid-morning after the Swiss National Bank raised its benchmark interest rate by 50 basis points, taking it to 1.5%.

— Hannah Ward-Glenton

Joseph Lubin, co-founder of the Ethereum Foundation, discusses the crypto market environment, regulators' crackdown on the space, and the hotly contested debate over whether ether should be classed as a security.

Nemetschek, a German software-provider for the construction industry, topped the Stoxx 600 in morning trade.

The company's stock added 11% after the publication of its full-year results, which showed a 15.8% rise in earnings to 257 million euros ($279.8 million) and forecast continued double-digit percentage revenue growth in 2024 with an EBITDA margin above 30%.

Swedish banking services group Handelsbanken was at the other end of the index, down 10%.

The European financial services sector was generally downbeat, shedding 1%, while banks were down 1.8%.

— Jenni Reid

Switzerland's central bank raised its benchmark interest rate by 50 basis points, taking it to 1.5%.

The Swiss National Bank is trying to bring inflation, which is now at 3.4%, down to its target range of between 0% and 2%.

The decision comes after volatility in the banking sector led to UBS' acquisition of Credit Suisse.

The Swiss Market Index was down 0.88% after the announcement, with the pan-European Stoxx 600 down 0.35%.

Read the full story here.

— Jenni Reid

Europe's blue-chip Stoxx 600 index was 0.4% lower shortly after the open, with banks leading sector losses, down 1%.

France's CAC 40 and Germany's DAX were flat on the previous session, but the U.K.'s FTSE 100 fell 0.35%, with the Bank of England's rate hike decision due at midday London time.

Most sectors were in the red, with media stocks also down around 1%, though technology stocks climbed 0.8%.

— Jenni Reid

U.K. inflation unexpectedly accelerated on Wednesday, but the headline figure "overstates the underlying inflation problem by a huge margin," Berenberg's senior economist, Kallum Pickering, said in a note.

Energy and food prices, key drivers of inflation since late 2021, remain far higher than before Russia's full-scale invasion of Ukraine in February 2022, Pickering wrote. But he added that wholesale gas prices and agricultural commodities have fallen this year, and base effects will wash out over the next 12 months, settling U.K. inflation at its underlying trend rate.

A wage-price spiral remains a risk rather than a likely scenario, he continued.

While markets have priced-in a near-guarantee of a 25 basis point hike from the Bank of England on Thursday, "fundamentals do not strongly support more than one additional hike," according to Pickering.

BoE policy-setters will be less focused on market expectations than on conversations they have had with banks over future lending behavior, he added, with any signs of caution and liquidity hoarding potentially leading them to pause.

That leaves open the possibility they will leave rates where they are today and keep the door open to another hike in May, Pickering said.

— Jenni Reid

Billionaire investor and CEO of Pershing Square Bill Ackman warned in a tweet bank deposit outflows could accelerate after Treasury Secretary Janet Yellen said the FDIC was not considering expanding bank deposit guarantees beyond its current limit of $250,000.

Yellen's comments led to a drop in regional bank shares in the U.S.

"I would be surprised if deposit outflows don't accelerate effective immediately," Ackman wrote in his tweet.

In a separate tweet, Ackman said that he fears markets are "heading for another train wreck," adding that he hopes regulators will "get this right."

"The longer this banking crisis is allowed to continue, the greater the damage to smaller banks and their ability to access low-cost capital," he said.

– Jihye Lee

Morgan Stanley upgraded the shares of a European energy firm — and also raised its price target for the stock.

According to the bank, it has "one of the strongest balance sheets" and is "close to debt-free."

CNBC Pro subscribers can read more here.

— Weizhen Tan

The Federal Reserve hiked its benchmark interest rate by another 25 basis points, in line with Wall Street's predictions.

This marks the central bank's ninth hike since it began raising rates in March 2022, as well as its first announcement following the recent fallout in the banking sector. The increase takes the benchmark federal funds rate to a target range between 4.75%-5%.

The Federal Open Market Committee said in a post-meeting statement that it "will closely monitor incoming information and assess the implications for monetary policy." Fed projections call for just one more hike this year.

— Hakyung Kim

E-commerce growth is back, and Morgan Stanley has several stock picks for investors to cash in, including a less obvious name it says has huge upside.

Pro subscribers can read more here.

— Zavier Ong

European markets are expected to open mixed Thursday.

The U.K.'s FTSE 100 index is expected to open 7 points higher at 7,624, Germany's DAX 33 points lower at 15,929, France's CAC 14 points lower at 7,194 and Italy's FTSE MIB 22 points lower at 27,025, according to data from IG.

Data releases Thursday include euro zone unemployment figures for the first quarter and revised gross domestic product data for the same period. There are no major earnings releases today.

— Holly Ellyatt