European markets close down 1% after Fed Chair Powell comments; Diageo slides 12%

This is CNBC's live blog covering European markets.

The logo of London Stock Exchange Group Plc in the office atrium in the City of London, UK, on Tuesday, March 14, 2023.
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LONDON — European markets pulled back on Friday after U.S. Federal Reserve Chair Jerome Powell said the central bank is "not confident" it has done enough to rein in inflation.

European markets

The pan-European Stoxx 600 index closed 1% lower. Food and beverage stocks led losses, ending the session down 3.1%, as all sectors closed in the red except oil and gas, which added 0.4%.

Powell said Thursday that he and fellow policymakers were encouraged by the recent slowdown in inflation rates, but were not yet confident they had achieved a monetary policy stance that is "sufficiently restrictive to bring inflation down to 2 percent over time."

The Fed last week held rates unchanged, along with the Bank of England and the European Central Bank, with markets now turning their attention to when rate cuts will begin next year — a position central bankers have tentatively pushed back against.

Shares in Asia-Pacific fell on Friday after the S&P 500 in the U.S. snapped an eight-day winning streak on the back of Powell's comments and spiking Treasury yields. On Wall Street, stocks rose as traders kept an eye on Treasury yields.

Biggest movers: GN Store Nord up 10%, Diageo down 15%

Shares of GN Store Nord jumped more than 10% on Friday after the Danish hearing aid manufacturer announced new cost savings targets as it met third-quarter earnings expectations.

At the bottom of the Stoxx 600, shares of British drinks giant Diageo dropped more than 15% after the company warned of weaker operating profit growth in the first half of its financial year due to "materially weaker" performance in Latin America.

- Elliot Smith

Stoxx 600 down 1% in afternoon trade

The pan-European Stoxx 600 index was down 1% by afternoon trade, with food and beverage stocks sliding 3.4% to lead losses while oil and gas stocks added 0.7%, as most sectors and major bourses traded in the red.

A negative open for Europe

European markets opened in the red on Friday.

The pan-European Stoxx 600 index was down 0.5% in early trade, with food and beverages stocks sliding 1.7% to lead losses while insurance stocks added 0.7%.

UK economy stagnated in the third quarter

Visitors look out to St. Paul's Cathedral from a rooftop in the City of London, UK.
Bloomberg | Bloomberg | Getty Images

The U.K. economy flatlined in the third quarter, initial figures showed Friday.

Gross domestic product showed no growth in the the three months to the end of September, following an increase of 0.2% the previous quarter. In annual terms, third-quarter GDP was 0.6% higher than the same period in 2022.

Services sector output dropped 0.1% on the quarter but was offset by a 0.1% increase in construction output, while output in the production sector flatlined.

U.K. Chancellor of the Exchequer Jeremy Hunt said high inflation remains the "single greatest barrier to economic growth" in the country, with the consumer price index remaining at 6.7% year-on-year in September.

"The best way to sustainably grow our economy right now is stick to our plan and knock inflation on its head," Hunt said.

"The Autumn Statement will focus on how we get the economy growing healthily again by unlocking investment, getting people back into work and reforming our public services so we can deliver the growth our country needs."

- Elliot Smith

Here are the opening calls

Britain's FTSE 100 is seen around 42 points lower at 7,414, Germany's DAX is set to shed around 93 points to 15,260 and France's CAC 40 is expected to drop around 47 points to 7,067.

— Elliot Smith

CNBC Pro: Eli Lilly and more: Strategist names 5 stocks set for 'significant' earnings growth

Rising rates and the possibility of a recession on the horizon have created a "mixed picture" for equity markets, according to one strategist — but several companies can look forward to markedly stronger earnings growth in the next year.

"When you look at what companies are saying about next year, they're not really being overly cautious or overly bullish … So, you get a sense that into next year, earnings will be robust in terms of steady year-on-year [growth]," Rahul Ghosh, portfolio specialist, equity division at T. Rowe Price, told "Street Signs Asia" on Thursday.

"But, if you're looking for significant earnings expansion, I suspect, at a market level, that's probably less likely. You really have to dig into individual companies and sectors."

Ghosh is looking favorably at three sectors — and named some of his favorite stocks.


— Amala Balakrishner

CNBC Pro: China versus India: The pros explain why they prefer one — and share their stock picks

Which economic giant should emerging markets investors go for: China or India?

CNBC Pro spoke to experts to ask which is the better market to invest in — and found that they were overwhelmingly in favor of one of them.

Subscribers can read about the reasons and stock picks they gave here.

— Weizhen Tan