This is CNBC's live blog covering European markets.
European stocks closed lower Monday as investors in the region gear up for the World Economic Forum in Davos, Switzerland.
The Stoxx 600 index provisionally ended down 0.5%, with major bourses and most sectors in negative territory. Household goods fell 1% as as travel stocks climbed 0.9%.
| TICKER | COMPANY | PRICE | CHANGE | %CHANGE |
|---|---|---|---|---|
| .FTSE | FTSE 100 | 8,445.80 | +17.67 | +0.21% |
| .GDAXI | DAX | 18,869.36 | +152.94 | +0.82% |
| .FCHI | CAC 40 Index | 8,239.99 | +14.19 | +0.17% |
| .FTMIB | FTSE MIB | 35,366.20 | +214.78 | +0.61% |
| .IBEX | IBEX 35 Idx | 11,362.80 | +123.50 | +1.10% |
The German economy contracted 0.3% in 2023, initial figures published by the national statistics agency showed.
"Overall economic development faltered in Germany in 2023 in an environment that continues to be marked by multiple crises," Federal Statistical Office President Ruth Brand said at a press conference.
Brand said high inflation, rising interest rates and weaker domestic and foreign demand all weighed on gross domestic product; and noted GDP was 0.7% higher than in 2019, before the pandemic.
Titled "Rebuilding Trust," this year's WEF runs from Jan. 14-19. Global business and political leaders will meet in the Swiss ski resort to discuss economic and geopolitical matters. This year, global trade, inflation, supply chains, technological change and wars in the Middle East and Ukraine are expected to top the agenda.
Perhaps the most heavyweight political figures set to be in attendance are China's second-in-command Li Qiang and French President Emmanuel Macron, who will both give special addresses.
Mainland China's market pared losses after the country's central bank left its medium-term policy loans rate unchanged.
U.S. markets are closed Monday.
European markets closed lower on Monday, with major bourses and almost all sectors in negative territory.
The pan-European Stoxx 600 provisionally ended down 0.5%, with household and mining stocks falling over 1%, respectively.
— Sam Meredith
The European Central Bank may defy market expectations and hold off on starting interest rate cuts during the whole of 2024, the institution's Governing Council member Robert Holzmann told CNBC at the World Economic Forum in Davos, Switzerland.
Asked about those who call for the first rate cut to take place as soon as April, Austria's central bank governor said: "I cannot imagine that we'll talk about cuts yet, because we should not talk about it. Everything we have seen in recent weeks points in the opposite direction, so I may even foresee no cut at all this year."
Read more here.
— Jenni Reid
Speaking to CNBC at the World Economic Forum in Davos, Switzerland, Alfred Stern, CEO of Austrian energy major OMV, discusses the need to diversify gas supplies amid Russia's ongoing war in Ukraine.
Analysts at ING say the German economy is at high risk of contracting for a second year in 2024, as recent drags on growth remain.
They highlight supply chain challenges, inflation, tighter montary policy, increased competition from China and its reduced need for German products, and structural issues.
"A combination of geopolitical risk events, cyclical headwinds but also homemade deficiencies ... even if the worst of the weakening in sentiment seems to be behind us, the hard economic reality does not look pretty," the Dutch bank's global head of macro, Carsten Brzeski, said in a Monday note.
The economy will also have to contend with the follow-through effects of European Central Bank tightening, the expected slowdown of the U.S. economy and the trade volatility in the Red Sea, he said.
"On a more positive note, what could lift economic sentiment and growth are positive real wage growth, a rebound in Asia and further down the road some rate cuts from the European Central Bank. Also, a turn in the inventory cycle could bring some relief in early 2024, although this turn has not yet happened and would probably only be short-lived," he added.
— Jenni Reid
China's central bank left its medium-term policy loans rate unchanged in a surprise move on Monday, but continued to inject liquidity.
The People's Bank of China said in a release that it held the rate at 2.50% on some 995 billion yuan ($138.84 billion) worth of one-year medium-term lending facility (MLF) loans.
A Reuters poll had expected the PBOC to cut the MLF rate.
A cut in the MLF would have helped boost China's economic recovery.
The CSI 300 index pared some earlier losses to fall about 0.29% following the decision.
— Shreyashi Sanyal
Cocoa jumped to its highest in 46 years as supply concerns continue to mount. Cocoa futures surged to $4,323 per metric ton, the highest since September 1977, according to data from FactSet.
Cocoa prices notched large gains last year after West African supplies were hit hard by heavy rains amid other issues including fungal disease.
BMI, a Fitch Solutions research unit, is not expecting significant relief in these supply constraints in 2024. In a recent research note, analysts estimate that cocoa production and quality from main producers Ivory Coast and Ghana could continue to be compromised due to "earlier excess rainfall and crop disease."
— Lee Ying Shan
Europe's utilities sector may have come under pressure over the past three years, but Goldman Sachs says a shift is underway, naming stocks to play the industry in 2024.
"We believe that the improved outlook on inflation and interest rates is likely to favor capital intensive/long duration assets, such as Renewable Energy (where the capital cycle also appears to have positively inflected, as evidenced by rising returns) and Power Grids (where the market appears to be overlooking the incremental organic growth opportunities)," the bank's analysts wrote.
The investment bank named a bunch of stocks it expects to rise by 30%.
CNBC Pro subscribers can read more here.
— Amala Balakrishner
Semiconductor stocks had a good year in 2023, bouncing back from the post-pandemic underperformance of 2022.
The PHLX Semiconductor index (Sox) index surged 65% in 2023, well outpacing the S&P 500.
Banks such as BofA and UBS are still bullish on the semiconductor sector despite its strong run in 2023.
CNBC Pro scoured through recent Wall Street research in January to look for the top 2024 semiconductor picks that analysts named.
Subscribers can read more here.
— Weizhen Tan
European markets are expected to open higher Wednesday.
The U.K.'s FTSE 100 index is expected to open 41 points lower at 8,470, Germany's DAX up 60 points at 18,783, France's CAC 22 points higher at 8,249 and Italy's FTSE MIB up 142 points at 34,945, according to data from IG.
Earnings are due from Allianz, EON, RWE, Commerzbank, Thyssenkrupp, TUI, Bilfinger, ABN Amro, Telecom Italia, Burberry and Ubisoft. The latest preliminary gross domestic product reading for the euro zone is also due.
— Holly Ellyatt