This is CNBC's live blog covering European markets.

European markets closed lower on Friday as political chaos in the U.K. continued following the resignation of Prime Minister Liz Truss.

Meanwhile, EU leaders debated how to tackle the bloc's energy crisis as they met in Brussels, after Germany gave the green light for discussions around a price cap.

The Stoxx 600 closed down 0.6%, with most sectors and major bourses in negative territory. Retail stocks led the losses, down 3% for the session.

On Wall Street, stocks were mixed in choppy trading on Friday as investors assessed more corporate earnings reports and the outlook for Federal Reserve rate hikes. Shares in Asia-Pacific mostly closed lower overnight as investors weighed inflation data from several economies.

European markets post downbeat end to week

The European Stoxx 600 index closed Friday 0.6% lower, though the U.K.'s FTSE 100 bucked the trend with a 0.37% rise.

British politics saw a turbulent week, with a huge pivot on fiscal policy Monday, the resignation of the interior minister Wednesday and finally the resignation of the prime minister Thursday.

Sterling spent most of the day lower against the dollar, though swung back into positive territory shortly before 5 p.m.

Elsewhere in Europe, EU leaders continued debating how to tackle the bloc's energy crisis, after Germany gave the green light for discussions around a price cap.

France's CAC 40 closed down 0.84% and Germany's DAX index fell 0.3%. Construction and telecoms stocks posted the biggest losses.

— Jenni Reid

Analysts say 'little changed' for GBP market as pound falls 1.4%

The British pound fell 1.3% against the dollar to $1.108 in early afternoon trading, more than wiping out moderate gains it made on Thursday as Prime Minister Liz Truss stepped down.

Sterling was trading at $1.1074 at 1:20 p.m. London time, its lowest level since Oct. 12.

"The pound has been susceptible to the broad strength in 'king dollar' today and reaffirms our view that what we saw yesterday — and even the prospects of a Rishi Sunak leadership – is not 'game changing' to GBP markets," Viraj Patel, senior strategist at Vanda Research, told CNBC.

"Overseas investors are likely to see this political volatility as another reason to get out of U.K. assets."

— Jenni Reid

Stocks on the move: Adidas extends losses, Telia down 9%

Adidas' losses have deepened to 12% during afternoon deals, with Puma following closely behind with a 9% drop in share price.

Swedish telecoms company Telia, meanwhile, slumped 9%. The company lowered its outlook for 2022 and 2023 on reporting third-quarter earnings.

— Hannah Ward-Glenton

Sterling falls further as UK PM contest begins

Sterling has fallen 1% to trade at $1.1127, losing gains made Thursday following the resignation of U.K. Prime Minister Liz Truss.

— Hannah Ward-Glenton

UK public sector borrowing soars to £20 billion

Public sector borrowing reached £20 billion ($22.2 billion) in the U.K. in September, up from £11.8 billion in August, according to the Office for National Statistics.

It is the second highest September borrowing figure since monthly records began in 1993.

The figure is £5.2 billion more than the £14.8 billion originally forecast by the ONS.

— Hannah Ward-Glenton

Retail leads losses as UK reports lower sales figures

Retail leads losses in the European markets this morning, down 2.9%.

Britain's retail sales figures were lower than expected, down 1.4% in September according to the Office for National Statistics.

The figure is 1.3% below pre-Covid levels in February 2020.

Retailers continue to cite rising prices and the cost-of-living crisis for hampering sales. The death of Queen Elizabeth II in September also caused many retailers to close.

— Hannah Ward-Glenton

Adidas shares down 7.2% after profit warning

Shares of Adidas have dropped 7.2% in early trade after the company issued a 2022 profit warning.

Puma is also trading around 4% lower following the Adidas announcement.

— Hannah Ward-Glenton

European markets: Here are the opening calls

The U.K.'s FTSE 100 is set to open 36 points lower at 6,905, according to data from IG.

Germany's DAX is seen opening around 119 points lower at 12,636, France's CAC is set to drop by 51 points to 6,026 and Italy's MIB index is expected to fall around 205 points at 21,398.

— Hannah Ward-Glenton

CNBC Pro: Goldman Sachs says these stocks could beat an increasingly likely recession

"The macro picture is arguably more challenging than it has been for some time," says Goldman Sachs, which is favoring a barbell strategy for the recession jitters.

The bank named several buy-rated stocks it thinks could do well against the current macro backdrop.

Pro subscribers can read more here.

— Zavier Ong

U.S. Treasury yields notch new decade-highs

The U.S. 10-year Treasury yield moved up as high as 4.272%, after topping 4.2% for the first time since 2008.

The policy-sensitive 2-year Treasury yield also rose to 4.639%, at its highest levels in 15 years.

The yield on the 30-year Treasury soared to a new 11-year peak of 4.266%.

Yields and prices move in opposite directions and one basis point equals 0.01%.

–Jihye Lee

CNBC Pro: Stay invested in chip stocks, one fund manager reveals how he’s trading the sector

The MSCI Semiconductor Index, down by 43% this year, reflects the market's sentiment toward a potential slowdown in economic growth.

In such an environment, should investors hold or sell the sector? Fund manager Brian Arcese shares with CNBC Pro Talks the one chip maker to hold.

CNBC Pro subscribers can read more here.

— Ganesh Rao