This is CNBC's live blog covering European markets.
European stock markets closed lower on Friday as investors took stock of a week of central bank rate hikes and the latest news from the banking sector.
The pan-European Stoxx 600 index closed 1.4% lower, with nearly all sectors posting declines.
| TICKER | COMPANY | PRICE | CHANGE | %CHANGE |
|---|---|---|---|---|
| .FTSE | FTSE 100 | 8,420.26 | -18.39 | -0.22% |
| .GDAXI | DAX | 18,704.42 | -34.39 | -0.18% |
| .FCHI | CAC 40 Index | 8,167.50 | -20.99 | -0.26% |
| .FTMIB | FTSE MIB | 35,398.82 | -11.31 | -0.03% |
| .IBEX | IBEX 35 Idx | 11,327.70 | +28.40 | +0.25% |
Markets slightly trimmed losses after European Central Bank President Christine Lagarde told EU leaders the euro area banking sector was resilient due to strong capital, liquidity positions and post-2008 reforms. She also said the ECB toolkit was equipped to provide liquidity to the financial system if needed.
But banks dropped 3.8% despite the reassurances. Citigroup this week downgraded the European banking sector to "neutral" from "overweight," citing the effects of continued monetary policy tightening.
Deutsche Bank pared earlier losses to close 8.5% lower, extending a 3.2% fall on Thursday after its credit default swaps, a form of insurance for bondholders, pushed higher.
UBS, Societe Generale, Barclays and BNP Paribas were among the banks to fall sharply.
Oil and gas stocks closed 2.8% lower, construction stocks were down 3.1% and industrials dropped 2.5%.
"Underlying sentiment is still cautious and in this environment no one wants to go into the weekend risk-on," said Nordea chief analyst Jan von Gerich, quoted by Reuters.
The Bank of England hiked its base rate by 25 basis to 4.25% on Thursday in a move that was priced in by markets after U.K. inflation recorded a surprise jump. The Swiss central bank raised its own benchmark interest rate by 50 basis points. Both decisions come in the shadow of the U.S. Federal Reserve hiking by 25 basis points.
Global markets have also been digesting the latest comments from U.S. Treasury Secretary Janet Yellen, who said on Thursday that the emergency actions used to back up Silicon Valley Bank and Signature Bank customers could be deployed again amid concerns over U.S. regional banks.
Asia-Pacific markets closed mixed on Friday, while U.S. stocks dropped during the morning session.
— Silvia Amaro contributed reporting
Monica Defend, chief strategist at Amundi Institute, discusses market nerves and the situation in European and U.S. banks.
Danish bank Sydbank fell to the bottom of the pan-European Stoxx 600 index in afternoon trading with a fall of 11.3%.
The share price fell to 291.80 Danish krone ($42.01), its lowest point since Dec. 28.
Sydbank joins other European banks at the bottom of the index, including Deutsche Bank, as the sector continues to weather the Credit Suisse fallout and investors consider contagion risk.
The banking sector as a whole was down 3.6%.
— Hannah Ward-Glenton
Oil prices fell amid banking sector concerns and after comments from the U.S. Energy Secretary Jennifer Granholm dampened demand prospects.
Granholm told lawmakers Thursday it could take years for the United States to refill its Strategic Petroleum Reserve after oil sales last year pushed the stockpile to its lowest level since 1983.
Both Brent crude and West Texas Intermediate crude futures fell over 4% earlier in the trading session, Reuters reported.
Brent crude was down 1.8% to $74.55 a barrel around 2.45 p.m. London time.
West Texas Intermediate was down 1.8% to trade at $68.70 a barrel.
— Hannah Ward-Glenton
Matti Lehmus, president and CEO at Neste, discusses how the company is helping to make the aviation industry more environmentally friendly.
U.S. stocks opened lower Friday as a plunge in shares of Deutsche Bank in Europe raised investor fears about the banking sector once again.
The Dow Jones Industrial Average slid 178 points, or 0.55%. S&P 500 dipped 0.48%, while Nasdaq Composite was 0.22% lower.
— Sarah Min
The euro was down 0.9% against the U.S. dollar at $1.0732 at 1:10 p.m. local time as concerns over the stability of the banking system, which had eased earlier in the week, roared back.
European stocks were in retreat and U.S. stocks were set to open lower.
The British pound, which has broadly held up amid recent volatility which has centered on Swiss banks, was down 0.6% at $1.221.
— Jenni Reid
Euro zone economic growth has accelerated to a 10-month high in March, according to the latest S&P composite Purchasing Managers' Index.
There were also signs of inflation easing, jobs growth accelerating and business confidence holding up, the survey found.
However, growth was driven by services, and manufacturing saw a decline in new orders, with output maintained due to backlogs.
A similar trend was seen in the U.K., where services activity increased for the second consecutive month but manufacturing production decreased. Input price inflation was at a two-year low and employment was stable.
— Jenni Reid
Paul Keel, CEO at Smiths Group, discusses full-year earnings, and how the company is supporting customers in their transition to low and no carbon products.
Deutsche Bank posted the steepest losses in morning trade, falling over 10% following a spike in credit default swaps.
Credit default swaps — a form of insurance for a company's bondholders against its default — leapt to 173 basis points on Thursday night from 142 basis points the previous day.
The bank's additional tier one (AT1) bonds also sold off sharply.
— Jenni Reid, Elliot Smith
European stocks fell in early Friday trade, with the Stoxx 600 index falling 1.2%.
The U.K.'s FTSE 100, France's CAC 40 and Germany's DAX were all down by around 1.4%.
Among sectors, banks plunged 3.2% as a sharp rise in default insurance costs at Deutsche Bank spooked investors and concerns about the stability of the sector returned.
The German bank was down 9% at 9:50 CET.
— Jenni Reid
A monthly consumer confidence survey from GfK showed U.K. households became more optimistic in February, with improvements in five measures that it records, including views of future financial situations, the ability to fund major purchases and the broader economic picture.
"The headline consumer confidence score is still severely depressed and the mood as well as the economy remain a long way off pre-lockdown levels, but a little consumer resilience might be what we need to soften any downturn in 2023," Joe Staton, client strategy director at GfK, said in the release.
The slight recovery benefited retailers in February, said Gabriella Dickens, senior U.K. economist at Pantheon Macroeconomics, in a note.
U.K. retail sales rose by 1.2% on the month in February, according to national figures also published Friday. The print came in above a consensus expectation of 0.2% and surpassed the 0.9% rise of January.
February retail sales were nevertheless down 3.5% year-on-year. The figure for the three months leading to February was also down 0.3% on the previous three months.
The outlook for retail is mixed, Dickens said, with households avoiding a 1% hit to disposable income because of the ongoing government-funded energy bill cap and suspension of an increase in fuel taxes, as well as rises in the state pension and living wage.
But they will still be affected by other tax measures and by the withdrawal of the energy bill grant program. Figures from the Insolvency Service show an uptick in redundancies in the coming months, while higher mortgage rates will begin to squeeze, Dickens added.
— Jenni Reid
Wall Street is downgrading European banks after stresses in the sector led to the emergency merger of two large Swiss banks.
Two investments also upgraded another sector and named a dozen stocks to own "in case markets turn sour".
CNBC Pro subscribers can read more here.
— Ganesh Rao
Some investors are tiptoeing back into bank stocks after last week's selloff, but fund manager Ian Mortimer is steering clear.
In fact, he has never owned a bank stock in any of his funds. He reveals why on CNBC Pro Talks.
Pro subscribers can read more here.
— Zavier Ong
Treasury Secretary Janet Yellen said Thursday that the federal emergency actions used to backstop Silicon Valley Bank and Signature Bank customers could be used again if necessary.
"We have used important tools to act quickly to prevent contagion. And they are tools we could use again," Yellen said in written testimony before a House Appropriations subcommittee.
"The strong actions we have taken ensure that Americans' deposits are safe," she added. "Certainly, we would be prepared to take additional actions if warranted."
Her comments come as regulators have aimed to reassure customers and investors amid the banking crisis that was promoted by Silicon Valley Bank's closure.
— Alex Harring, Christina Wilkie