European Markets Close Lower, Banking Stocks Gain

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This is CNBC's live blog covering European markets.

European markets saw choppy trade Thursday, although banking stocks maintained strong gains.

The pan-European Stoxx 600 was down 0.59% as trading closed in London, after flipping between mild losses and gains during the morning.

Banking stocks, however, added 1.71% following a Morgan Stanley analyst note upgrading the banking sector. The euro zone bank index hit its highest level since June 10, Reuters reported.

The U.K.'s FTSE 100 index closed up 0.07% as France's CAC 40 fell 1.04% and Germany's DAX dipped 0.55%.

European markets closed lower on Wednesday as investors reacted to the latest inflation data out of the U.S. while Wall Street saw modest gains following a massive sell-off for U.S. stocks on Tuesday.

Shares in the Asia-Pacific mildly rose on Thursday after a negative session Wednesday.

Germany's KION Group drops a further 7.4% after profit warning

German handling equipment manufacturer KION Group dropped a further 7.4% by mid-afternoon.

Shares plunged more than 25% on Wednesday after the Frankfurt-based company predicted it would be making a third-quarter loss because of supply chain shortages and increasing material and energy costs.

— Hannah Ward-Glenton

Oil futures extend losses, Brent crude down by $3 a barrel

Brent crude has fallen 3% with expectations of weaker demand and a strong U.S dollar putting it down to $3 a barrel.

The International Energy Agency said this week oil demand growth would grind to a standstill in the fourth quarter.

— Hannah Ward-Glenton

Here's a snapshot of U.S. markets

U.S. equities hovered near the flatline on Thursday morning as investors mulled over several economic reports that showed a muddy picture of the U.S. economy.

Futures tied to the Dow Jones Industrial Average ticked up 45 points, or 0.1%. S&P 500 futures dipped about 0.1%, and Nasdaq 100 futures lost 0.2%.

On Thursday, retail sales and initial jobless claims came in better than expected, but import prices saw a smaller drop than estimates suggested. While those reports suggest that the U.S. consumer sector is holding up, they will do little to alleviate concerns about persistent inflation.

— Tanaya Macheel

Stocks on the move: Vantage Towers up 12%, Wacker Chemie down 6%

German-based companies are the biggest movers during mid-afternoon deals in London.

Shares of tower manufacturer Vantage Towers rose 12.2%, while multinational chemical firm Wacker Chemie fell nearly 6%.

Shares of Wacker Chemie were seen lower for the fourth day in a row.

— Hannah Ward-Glenton

European banks attractive: Morgan Stanley

European banks look cheap and have 40% potential upside, Morgan Stanley analysts said in a note Thursday.

A shift toward tighter monetary policy and easier fiscal policy has accelerated recently, they said, implying further earnings-per-share upgrades with less risk from a rise in loan losses.

Sophie Lund-Yates, senior analyst at Hargreaves Lansdown, told CNBC: "This is clearly a positive indicator at a time when wider sentiment is jittery at best, and could be driven by the idea that policy makers' more aggressive stance on inflation is expected to start paying off."

Banking stocks outperformed the wider European market Thursday and were up 1.58% in early afternoon trading.

— Jenni Reid

FTSE 100 leads gains

The U.K.'s FTSE 100 index rose 0.5% during morning European trading, ahead of Germany's DAX, which gained 0.26%, and France's CAC 40, which fell 0.23%.

U.K. tech firm Oxford Nano was the top riser among European stocks after reporting a doubling in revenue in half-year results, followed by Rolls-Royce, with both gaining around 6%.

— Jenni Reid

Shell's CEO Ben van Beurden to step down

Oil giant Shell announced that CEO Ben van Beurden will step down at the end of the year after nearly a decade at the helm.

Wael Sawan, Shell's renewables boss, will become its next chief executive on Jan. 1.

Read more here.

— Sam Meredith

CNBC Pro: Want higher returns? Kevin O'Leary says put your money in 'harm's way' — and shares his stock picks

Billionaire investor Kevin O'Leary believes market volatility is back, and thinks investors will have to take on some risks to get higher returns.

"If you want to get a 6% to 8% return, you're going to have to put some money in harm's way," he told CNBC "Street Signs Asia" on Wednesday.

He names the stocks and sectors he likes to navigate the current volatility.

Pro subscribers can read more here.

— Zavier Ong

U.S. 2-year Treasury yields hits 3.8% again

The U.S. 2-year Treasury note briefly rose to 3.8% again after reaching its highest level since November 2007 earlier this week.

Short-term bond yields, which are most sensitive to Fed policy, soared following the U.S. inflation report on Tuesday.

The yield on the benchmark 10-year Treasury was also at 3.41% and the yield on the 30-year Treasury bond was at 3.46%.

Yields move inversely to prices, and a basis point is equal to 0.01%.

–Jihye Lee

CNBC Pro: Morgan Stanley says the S&P 500 is set for a comeback by year-end. These are its top stock picks

U.S. markets had a meltdown on Tuesday — the worst since June 2020 — following yet another hot inflation report. But that may not last for long, according to Andrew Slimmon of Morgan Stanley Investment Management, who says the S&P 500 could enjoy upside by year-end.

He predicts the level that the S&P 500 will rise to by the year end, and also picks stocks to buy into the "fear."

CNBC Pro subscribers can read more here.

— Weizhen Tan

European markets: Here are the opening calls

European stocks are expected to open in negative territory on Wednesday as investors react to the latest U.S. inflation data.

The U.K.'s FTSE index is expected to open 47 points lower at 7,341, Germany's DAX 86 points lower at 13,106, France's CAC 40 down 28 points and Italy's FTSE MIB 132 points lower at 22,010, according to data from IG.

Global markets have pulled back following a higher-than-expected U.S. consumer price index report for August which showed prices rose by 0.1% for the month and 8.3% annually in August, the Bureau of Labor Statistics reported Tuesday, defying economist expectations that headline inflation would fall 0.1% month-on-month.

Core CPI, which excludes volatile food and energy costs, climbed 0.6% from July and 6.3% from August 2021.

U.K. inflation figures for August are due and euro zone industrial production for July will be published.

— Holly Ellyatt

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