Europe stocks close higher as markets await Fed decision; Stoxx 600 logs monthly gains of 1.5%

Norway's giant wealth fund, the world's biggest single stock market investor, touted the possibility that Danish drugmaker Novo Nordisk and U.S. rival Eli Lilly may become the first healthcare members of the trillion-dollar club.

Gemma Game, head of health care sector strategy at Norges Bank Investment Management (NBIM), said Tuesday that the launch of safe and effective weight loss drugs last year had helped to make Novo Nordisk and Eli Lilly household names.

"The story is far from over," Game said during a news conference. "Perhaps in the future we'll be talking about Eli Lilly and Novo Nordisk as the world's first trillion-dollar health care companies."

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— Sam Meredith

Shares of Vodafone were down 3.5% in early afternoon deals, after the British telecoms firm rejected a fresh proposal from France's Iliad to merge their Italian businesses.

Iliad announced the news on Wednesday morning. The company had offered Vodafone 6.6 billion euros ($7.15 billion) in cash and 2 billion euros in a shareholder loan, as part of a proposed merger to create a new entity it said would be the "most innovative telecom challenger for Italy."

Iliad would have received 400 million euros in cash proceeds and also 2 billion euro of a shareholder loan.

Iliad on Wednesday said it was confident the offer was the "best possible business combination to benefit a struggling Italian market and telecommunications industry."

It added that it would now pursue a stand-alone strategy, strengthen its position in Italy and "fiercely pursue market share gains across all segments."

Vodafone has previously said it was in talks with several parties about options for its Italian business, including a merger or disposal. In its 2023 financial year, Vodafone Italia revenue slipped 4.2% to 4.8 billion euros, while adjusted earnings fell 14.5%.

"We are no longer in talks with Iliad, but our discussions with others continue," a Vodafone spokesperson said Wednesday.

— Jenni Reid

Shares of Spain's Santander ticked 2% higher in morning trade, after the bank reported record profits ahead of market expectations.

Fourth quarter net profit was 28% higher year on year to 2.93 billion euros ($3.17 billion) on the back of a strong performance in Europe.

Net profit for the whole of 2023 was up 15% to 11.08 billion euros.

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— Jenni Reid

Novo Nordisk CEO Lars Fruergaard Jørgensen speaks to CNBC following blockbuster earnings from Europe's largest company, driven by soaring demand for its obesity and diabetes drugs Wegovy and Ozempic.

Shares of Swedish retailer H&M were down 7.5% at 9:20 a.m. in London, after the company announced weaker sales and the surprise departure of its chief executive.

H&M sales were 1% lower for 2023 in local currencies, and 4% lower year-on-year across December 2023 and January 2024.

In an unexpected leadership shake-up, Helena Helmersson, who has been in the CEO role for four years, will be replaced by Daniel Ervér.

In a statement, Helmersson said she was stepping down with "mixed feelings" and was proud of how the firm navigated the pandemic and geopolitical challenges.

"However, it has been very demanding at times for me personally," she said.

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— Jenni Reid

Swiss pharmaceutical firm Novartis on Wednesday reported 10% growth in net sales and 18% higher core operating income.

However, core net income came in below consensus analyst expectations.

Switzerland-listed shares were 4% lower at 8:23 a.m. in London.

The company said it expected net sales growth by a mid-single digit and core operating income to growth by a high single digit this year.

"A lot of great growth drivers are performing really well. So right now we have about 10 different products that had positive Phase III readouts last year, that gives us a lot of momentum," Novartis CEO Vasant Narasimhan told CNBC's Silvia Amaro.

"The difference in 2024 is we do face some products losing exclusivity. So we have three products ... which we expect to lose exclusivity in the United States. So that creates a little bit of headwinds for us. But overall, when you look at the underlying growth of our growth drivers, they are growing at double digits, and that should continue."

The U.S. remains a key focus for the company, Narasimhan said, where it is targeting 50% of its sales.

— Jenni Reid

Novo Nordisk on Wednesday reported sharply higher sales and forecast growth for 2024 between 18% and 25% as its drugs Ozempic and Wegovy, used to treat diabetes and for weight loss, experience increased demand.

The Danish pharmaceutical company's net sales rose 31% year-on-year in 2023, to 232.26 billion Danish krone ($33.7 billion). Operating profit rose 37%, while fourth-quarter profit was above expectations.

Novo Nordisk has soared in value over the last year, at times becoming Europe's most valuable firm by market capitalization.

The 2023 results were fueled by strong performance in the company's diabetes and obesity care division, with obesity care in particular spiking by 154% at CER to 41.6 billion.

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— Jenni Reid

As China's electric vehicle market goes from strength to strength, investors worldwide are showing a growing interest in getting involved.

"We're particularly bullish on this fanning out of Chinese competitiveness in EV makers," Kingsley Jones of boutique advisory firm Jevons Global told CNBC's Pro Talks on Thursday. "There's lots of them."

However, significant hurdles remain for retail investors before they can be part of China's EV growth story. For example, many stockbrokers charge a premium to trade Hong Kong-listed stocks, and Chinese regulations prevent retail investors abroad from buying mainland-listed "A-shares" directly.

Instead, the veteran investor pointed out that ETFs with concentrated positions remain viable options for those seeking exposure to the Chinese EV growth potential.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Wilmington Trust chief economist Luke Tilley said Tuesday that he isn't expecting any big changes in the Federal Reserve's posture tomorrow, but that the central bank could keep laying the groundwork for rate cuts later this year.

"When the Fed changes communication, it's really slow. It's like turning a battleship. They do it very, very slowly. And what they need to start pivoting towards is sort of confirming the expectation of rate cuts more and more," Tilley said.

The Wilmington Trust team expects the first rate cut from the Fed to come on May 1.

The Fed could also point to international developments like the conflict in the Middle East as a potential reason for caution on inflation, Tilley said.

"I think they will always point out risk factors, upside risk factors, for inflation, especially as they are trying to temper market expectations for a whole lot of cuts. I don't think that that would cause them to not cut, but they will definitely cite some of those risks," he said.

— Jesse Pound

One stock frequently showed up among analysts' top calls this month.

They are bullish on it as a play on artificial intelligence.

CNBC Pro subscribers can read more here.

— Weizhen Tan

European markets are expected to open higher Thursday.

The U.K.'s FTSE 100 index is expected to open 22 points higher at 8,442, Germany's DAX up 26 points at 18,896, France's CAC 7 points higher at 8,244 and Italy's FTSE MIB up 64 points at 35,091, according to data from IG.

Earnings are due from Swiss Re, Zurich Insurance, Siemens, Deutsche Telekom, BT and EasyJet, among others. There are no major data releases.

— Holly Ellyatt