European stocks close higher after best day in 11 months; LVMH slides 6%

Shares of German company Fresenius slumped 18% after Novo Nordisk announced it would stop a trial to treat certain types of kidney failure because of early signs of success.

Fresenius' dialysis-care business could see demand drop if the drug proves to be effective in treating kidney failure in diabetes patients.

— Hannah Ward-Glenton

Major stock indexes opened higher on Wednesday.

• The S&P 500 was up 0.2%, or 8.35 points.
• The Dow Jones Industrial Complex gained 0.25%, or 84.75 points.
• The tech-heavy Nasdaq inched higher by 0.4%, or 57.13 points.

— Pia Singh

Gita Gopinath, first deputy MD at the International Monetary Fund, discusses the structural reforms needed to boost growth and the challenge for policymakers.

The European Central Bank remains willing to raise interest rates further if data shows it is needed, but is likely finished with its hiking cycle, governor of the Bank of Portugal, Mario Centeno, said Wednesday.

"Bar additional shocks that we don't see coming, of course, we will be done, that's my interpretation of the decision in September," Centeno told CNBC at the International Monetary Fund's annual meetings in Marrakech.

The ECB hiked to a record level in September but said its Governing Council believed "interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target."

Euro zone inflation cooled to 4.3% last month, its lowest level since October 2021, though there is divergence between member states.

— Jenni Reid

While market reaction remains muted following the attack on southern Israel by Palestinian militant group Hamas, some industry watchers caution that several risks resulting from the conflict are yet to be fully priced in.

"Any extension of the war will likely fan fears of oil supply disruption and further demand for safe-haven assets such as gold, the U.S. dollar and the Swiss franc," analysts at BNY Mellon said in a research note Tuesday. 

Read the full story here.

— Lee Ying Shan

European stock markets were choppy in early trade, with the Stoxx 600 moving between losses and gains.

The U.K.'s FTSE 100 was flat at 9:30 a.m. in London, while Germany's DAX fell 0.2% and France's CAC 40 fell 0.96%.

— Jenni Reid

Luxury stocks were pulled lower after industry bellweather LVMH reported a slowdown in revenue growth in the third quarter and first nine months of the year, and as its CFO said performance was likely to normalize.

Christian Dior — which is helmed by Delphine Arnault, the daughter of LVMH chairman and CEO Bernard Arnault — fell 5%. Switzerland's Richemont dropped 4.2% as Burberry, Hugo Boss, Hermes and Kering all traded lower.

— Jenni Reid

Shares of luxury giant LVMH were down nearly 8% at the open after the company reported 14% revenue growth for the first nine months of 2023, down from 20% in the same period in 2022.

Multiple analysts cut target prices on the stock following the report after the market close Tuesday.

All LVMH sectors grew except wine and spirits, which it said suffered from a high basis of comparison and waning demand from the U.S. and CHina.

"After three roaring years, and outstanding years, growth is converging toward numbers that are more in line with historical average," LVMH chief financial officer Jean-Jacques Guiony told analysts, according to Reuters.

— Jenni Reid

Consumer spending in China isn't growing as quickly as it did before the pandemic, analysts said.

Retail sales for the Sept. 29 to Oct. 5 holiday period rose by 9% from a year ago, according to state media reports of Ministry of Commerce data. The figures excluded the final day of the Golden Week holiday.

Analysts pointed to factors including the impact of the property slump — since much of household wealth is in real estate — and a decline in government spending due to local debt troubles as reasons contributing to slowdown in consumer spending.

Read the full story here.

— Evelyn Cheng, Shreyashi Sanyal

Shares of luxury giant LVMH were down nearly 8% at the open after the company reported 14% revenue growth for the first nine months of 2023, down from 20% in the same period in 2022.

Multiple analysts cut target prices on the stock following the report after the market close Tuesday.

All LVMH sectors grew except wine and spirits, which it said suffered from a high basis of comparison and waning demand from the U.S. and CHina.

"After three roaring years, and outstanding years, growth is converging toward numbers that are more in line with historical average," LVMH chief financial officer Jean-Jacques Guiony told analysts, according to Reuters.

— Jenni Reid

European stocks are set to open lower Wednesday, according to IG data.

The U.K.'s FTSE 100 is seen 22.3 points lower at 7,612, with France's CAC 40 down 61.5 points at 7,102 and Germany's DAX down 47 points at 15,376.

— Jenni Reid

South Korean stocks jumped about 2%, hitting a two-week high on a boost from chip giant Samsung Electronics.

Samsung is expecting a 78% drop in operating profit in the quarter ended September, according to guidance released by the company. The operating profit forecast was slightly higher than analyst expectations. Shares of the company jumped 3.77%.

Counterpart SK Hynix rose about 3%.

— Shreyashi Sanyal

Investors have to contend with an increasingly volatile market — wider geopolitical risks from the Israel-Hamas conflict are adding to the existing uncertainty from rising bond yields and higher rates.

Some analysts recommend buying dividend stocks as a way around it.

For those interested in that strategy, CNBC Pro screened for stocks with safe and high dividend yields.

CNBC Pro subscribers can read more here.

— Weizhen Tan

A number of winners and losers have emerged from recent developments in the battery industry, according to analysts from Goldman Sachs, as it forecasts a "more rapid decline" in prices.

There are a number of stocks it expects to benefit, including one that it expects to soar.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

An underwater gas and communications pipeline between Finland and Estonia has been damaged, which the Finnish government has attributed to "external activity," according to an official statement. European gas prices have spiked as a result.

An investigation into what happened has been underway since Sunday, and it remains unknown what specifically caused the damage. "These events have no impact on our security of supply," Finnish President Sauli Niinisto said in a statement.

The front-month gas price at the Dutch Title Transfer Facility (TTF) hub, a European benchmark for natural gas trading, was last seen 11.8% higher, trading at 49.15 euros ($52.14) per megawatt hour.

"The fall in pipeline pressure was quite fast, which would indicate it's not a minor breach. But the cause of it remains unclear," a Baltic energy official with knowledge of the situation told Reuters.

The pipeline stretches between Inkoo in Finland and Paldiski in Estonia, across part of the Baltic Sea that stretches into Russian waters.

— Hannah Ward-Glenton

The consumer outlook for where inflation is headed worsened slightly in September, according to a New York Federal Reserve survey released Tuesday.

Expectations for inflation a year from now increased to 3.7%, up 0.1 percentage point from August, the survey showed. On a three-year basis, the outlook rose to 3%, up 0.2 percentage point. That came even though the outlook for gas, medical care and rent all declined.

Also in the survey, the expectation for the cost of education increase decelerated, down to 5.8% from 8.2%, the biggest one-month decline in the survey's history.

—Jeff Cox

Bank of America has identified five global stocks it says are set to benefit as the use cases of artificial intelligence applications grow significantly.

In an Oct. 3 note titled "End-device AI: Great potential with hidden gems awaits," the bank said customized and private AI services could soon be brought directly to users' end devices, revolutionizing smartphones, tablets, cars and more.

The analysts also likened end-device AI to J.A.R.V.I.S., the AI assistant used by Iron Man.

CNBC Pro subscribers can read more here.

— Ganesh Rao