European markets close mixed; EU commission ups inflation forecast; BBVA falls 4.2%

Jenni Reid
Hannah Ward-Glenton
Holly Ellyatt

This is CNBC's live blog covering European markets.

European markets were mixed on Monday, with investors following U.S. debt ceiling negotiations, Turkish elections and a higher forecast for EU inflation this year.

The pan-European Stoxx 600 index provisionally closed 0.2% higher, with U.S. stocks similarly cautious. Most sectors posted modest gains, as mining stocks led the pack with a 1.2% rise, while chemicals, media and retail all slipped around 0.2%.

France's CAC 40 and Germany's DAX ended the day flat, while the U.K. FTSE 100 was up 0.3%.

European markets

.FTSEFTSE 1007,412.45-57.71-0.77%
.FCHICAC 40 Index6,996.73-0.320.00%
.FTMIBFTSE MIB 27,435.59-46.62-0.17%
.IBEXIBEX 35 Idx9,102.90-62.60-0.68%

President Joe Biden said Sunday he believed an agreement on the U.S. debt ceiling could be reached, after Treasury Secretary Janet Yellen said letting the nation default on its debt should be "unthinkable."

In Europe, the EU's executive arm raised its forecasts for inflation for the euro area to 5.8% this year and 2.8% in 2024, and said it expects the European Central Bank to continue with rate hikes, further weakening lending conditions.

But it also revised its GDP estimates higher, forecasting 1% growth this year from a previous 0.8% estimate.

Meanwhile, Turkey is heading for an unprecedented runoff vote after neither incumbent President Tayyip Erdogan nor his rival Kemal Kilicdaroglu won an outright majority.

With neither candidate clearing the 50% threshold needed to avoid a second round, another vote will be held on May 28.

Shares of Spain's BBVA — the European bank with the highest exposure to Turkey, according to the Wall Street Journal — posted the steepest decline in the Stoxx 600, down 4.2%.

Asia-Pacific markets closed mostly higher, even after two out of three major U.S. indexes recorded a second straight week of losses.

Mon, May 15 2023 11:49 AM EDT

Europe stocks close slightly higher

European stock markets traded mixed on Monday, with the benchmark Stoxx 600 index closing 0.2% higher.

The U.K.'s FTSE 100 gained 0.3%, boosted by mining and financial stocks, while Germany's DAX and France's CAC 40 finished near the flatline.

See Chart...
Stoxx 600 index.

— Jenni Reid

Mon, May 15 2023 10:46 AM EDT

Turkish lira will likely devalue whether or not Erdogan wins, strategist says

Ozan Ozkural of Tanto Capital Partners discusses Turkey's elections and says if President Recep Tayyip Erdogan loses, the country's foreign policy wouldn't change, but its monetary policy "will have to readjust into market norms."

Mon, May 15 2023 10:35 AM EDT

Turkey was ‘uninvestable’ until now, strategist says

Mike Harris, founder of Cribstone Strategic Macro, says anyone who went with "naked long Turkey" before the election results was "basically taking a view on the polls," which tend to be "really erratic."

Mon, May 15 2023 9:38 AM EDT

U.S. stocks rise slightly at open

The major averages ticked higher in early trading. The Dow rose about 20 points. The S&P 500 and Nasdaq advanced 0.1% each.

— Fred Imbert

Mon, May 15 2023 7:36 AM EDT

Basic rules of banking seem to be forgotten in the U.S. banking system, says illimity Bank CEO

Corrado Passera, CEO of illimity Bank, discusses the contrast between the U.S. and European banking systems.

Mon, May 15 2023 6:38 AM EDT

Yellen is 'hopeful' on debt ceiling deal

Treasury Secretary Janet Yellen said over the weekend negotiations were making progress on a debt ceiling deal.

"I'm hopeful. I think the negotiations are very active. I'm told they have found some areas of agreement," said Yellen in an interview with the Wall Street Journal on Saturday from Japan during a meeting of G-7 finance ministers.

President Joe Biden and House Speaker Kevin McCarthy are expected to meet early this week, CNBC has reported. The Treasury Department said the U.S. may not be able to meet its financial obligations as early as June 1.

—John Melloy

Mon, May 15 2023 5:17 AM EDT

Siemens Energy up 4% on record orders and strong sales

Shares of Siemens Energy gained as much as 4% in morning trade after the German company reported record orders and forecast-beating sales in the second quarter.

Siemens Energy also lifted its revenue outlook as its order book surpassed the 100 billion euro ($109 billion) mark.

Sales for the months January to March were up 24% from the precious year at 8 billion euros, and the group now anticipates revenue to grow between 10% and 12%, up from its initial 3-7% forecast.

— Hannah Ward-Glenton

Mon, May 15 2023 4:38 AM EDT

AXA CFO says the insurance firm is seeing price increases across the board

Alban de Mailly Nesle, CFO of AXA, discusses the insurance company's first-quarter earnings and discusses its pricing strategy as it looks to overcome macroeconomic challenges.

Mon, May 15 2023 4:17 AM EDT

European Commission hikes inflation forecasts

The European Commission, the executive arm of the EU, raised its forecasts for inflation in the region and warned of tighter financing conditions.

In its latest economic forecasts, the Brussels institution estimated inflation will reach 5.8% this year and 2.8% in 2024 for the euro area. This is well above the European Central Bank's target of 2%.

As a result, the commission now expects the ECB to continue its rate hiking cycle, which in turn could deteriorate lending conditions across the region.

"As inflation remains high, financing conditions are set to tighten further. Though the ECB and other EU central banks are expected to be nearing the end of the interest rate hiking cycle, the recent turbulence in the financial sector is likely to add pressure to the cost and ease of accessing credit, slowing down investment growth and hitting in particular residential investment," the European Commission said in a statement.

Back in March, several smaller U.S. banks came under pressure off the back of higher interest rates. The cascade of rescues stateside raised questions about the stability of the banking system and whether more lenders will succumb to the pressure of rate increases.

European officials have stressed that European banks are well capitalized and under tighter regulatory controls. Nonetheless, in an environment of higher interest rates, borrowers might struggle to respect credit repayments.

The European Commission also said that there's better growth prospects for the region, revising upward its GDP estimates. It now expects growth in the EU to reach 1% this year versus 0.8% expected about three months ago, and to hit 1.7% in 2024 rather than a previous forecast of 1.6%.

—Silvia Amaro

Mon, May 15 2023 3:42 AM EDT

Turkey's BIST-100 index down as much as 6% on presidential election results

Turkey's BIST-100 index saw a downturn of as much as 6% as markets opened, with investors responding to the uncertainty prompted by the country's inconclusive presidential election results.

Turkey now faces an unprecedented runoff after neither 20-year incumbent Recep Tayyip Erdogan nor his rival, Kemal Kilicdaroglu, secured more than 50% of the vote.

— Hannah Ward-Glenton

Mon, May 15 2023 3:27 AM EDT

Platinum shortage in 2023 will be worse than expected, World Platinum Investment Council says

The world's platinum shortage will be worse than expected in 2023, according to the latest report by the World Platinum Investment Council.

The platinum deficit for 2023 will be around 983,000 ounces (983 koz), the WPIC report said, which is a 77% upward revision from ts last forecast in March.

See Chart...
Platinum price chart.

Global demand for platinum will see a 28% uptick this year from the last, while supply will decrease 1% year on year.

— Hannah Ward-Glenton

Sun, May 14 2023 9:17 PM EDT

CNBC Pro: UBS is betting on European banks over automakers right now. Here's why

European banking stocks are poised to outperform automakers in the foreseeable future, according to UBS.

The investment bank highlighted three structural changes that could drive significant gains for banking stocks over their automotive counterparts, despite similarities in their economic cycles.

CNBC Pro subscribers can read more about those three reasons here.

— Ganesh Rao

Sun, May 14 2023 9:17 PM EDT

CNBC Pro: Bank of America loves these 10 unloved global stocks with major upside

Bank of America strategists have named the ten European stocks that they believe are currently undervalued and could provide significant investment returns.

These picks, which the investment bank refers to as the "Beat Factor Top 10," are primarily made up of industrial and financial companies.

One of the stocks offers more than 60% upside over the next 12 months, according to the investment bank.

CNBC Pro subscribers can read more here.

— Ganesh Rao

20 Hours Ago

European markets: Here are the opening calls

European markets are expected to open lower Wednesday.

The U.K.'s FTSE 100 index is expected to open 13 points lower at 7,461, Germany's DAX down 46 points at 15,041, France's CAC down 18 points at 6,978 and Italy's FTSE MIB down 77 points at 27,417, according to data from IG. 

Data releases Wednesday include euro zone retail sales and producer prices for August and final purchasing managers' index figures for September. On the earnings front, retailer Tesco releases interim results.

— Holly Ellyatt

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