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European Markets Close Higher as Positive Momentum Builds and U.S. GDP Beats

Thomas Kienzle | AFP | Getty Images

This is CNBC's live blog covering European markets.

European markets advanced on Thursday, building on positive momentum seen in the previous trading session.

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The pan-European Stoxx 600 closed up by 0.4%, with retail stocks adding 2.2% to lead gains as most sectors and major bourses finished in positive territory. Food and beverage stocks bucked the trend to slide 1.8%.

Markets have been buoyed by data this week showing improved business sentiment in Germany and an uptick in euro zone services and manufacturing activity, prompting optimism that a recession in the region might be avoided.

On Wall Street, the Nasdaq Composite rose as traders combed through the latest batch of corporate earnings and fourth-quarter gross domestic product that came in above expectations.

U.S. GDP grew 2.9% in the fourth quarter, Commerce Department figures revealed Thursday, exceeding estimates even as recession fears persist.

U.S. GDP rose 2.9% in the fourth quarter, more than expected even as recession fears loom

U.S. GDP grew by an annualized 2.9% in the fourth quarter, the Commerce Department reported Thursday, above a consensus estimate of 2.8% from economists polled by Dow Jones.

The growth rate was slightly slower than the 3.2% pace in the third quarter.

Read the full story here.

Johnnie Walker-maker Diageo beats first-half sales estimates

Diageo, the world's largest spirits maker, beat first-half sales forecasts as it raised prices and more people drank premium spirits.

"Every region of the world had growth. The top end of our portfolio, the top 28%, the most expensive products, grew double digit in every region of the world," Chief Executive Ivan Menezes told CNBC's "Squawk Box Europe."

"So the fundamentals with our consumer base are strong. People are enjoying spirits more than ever and drinking better, not more."

Diago shares were down around 6.7% at 10:30 a.m. London time.

Read the full story here.

— Jenni Reid

There's 'close to 100% certainty' there will be a recession in the U.S. this year, CIO says

James Morton, CIO of Santa Lucia Asset Management, says the "Biden team need to look at the numbers because they obviously don't know what they're talking about."

Stocks on the move: Sartorius up 8%, Diageo down 5%

Corporate earnings were the main driver of individual share price action in Europe on Thursday morning.

Shares of German pharmaceutical company Sartorius climbed 8% after its full-year earnings report, while British alcoholic beverage giant Diageo slid 5% to the bottom of the Stoxx 600 after its first-half results.

- Elliot Smith

CNBC Pro: Wall Street majors share when global stock markets might bottom and by how much

As stocks continue their rally, several major financial institutions are now predicting a significant downturn in global equity markets.

The S&P 500 index has risen by more than 10% since its lows in October last year. In Europe, the STOXX 600 has increased by more than 15% over the same period.

But, according to some investment banks, those gains are now at risk as they fear the lagged effects of monetary tightening are likely to hit earnings and cause compression in profit margins this year.

CNBC Pro subscribers can read about when the market is likely to bottom and by how much here.

— Ganesh Rao

CNBC Pro: Want to cash in on China's reopening? Bank of America and UBS have some less obvious stock picks

Stocks in certain key sectors that are directly related to China's reopening, such as domestic consumption and travel, have done well in recent months.

Investors looking for entry into these stocks may find them unpalatable at current valuations. But there could be another way to play the reopening, with Bank of America and UBS having identified a raft of less obvious beneficiaries outside of China.

Pro subscribers can read more here.

— Zavier Ong

Germany's Ifo says business sentiment is brighter, no technical recession expected

German business sentiment has perked up this month, according to a widely watched survey from the Munich-based Ifo Institute.

The group's Business Climate Index rose to 90.2 points from 88.6 points on "considerable less pessimistic expectations," a release said, although this was below its 2021 and early 2022 level. Companies in the services sector also reported lower satisfaction with their current situation.

However, manufacturing firms signaled improved present satisfaction and future optimism, and there was improved sentiment for trade.

"The expectation was that there might be a recession in the fourth quarter of '22 and the first quarter of '23. Now it looks like the last quarter was flat," president of the Ifo, Clemens Fuest, told CNBC's Arabile Gumede.

"The economy may still be shrinking a little in the first quarter, but given the improvement in expectations we're seeing now from businesses, it is very unlikely we will have a technical recession."

— Jenni Reid

CNBC Pro: Lithium's got a strong year ahead of it — and China's reopening will boost this stock, analyst says

Things are looking up for the electric vehicle industry, thanks to China's reopening — particularly in the second half of the year, one analyst says.

Corinne Blanchard, vice president of lithium and clean tech equity research at Deutsche Bank, names one top stock pick.

CNBC Pro subscribers can read more here.

— Weizhen Tan

European markets: Here are the opening calls

European markets are heading for a higher open Thursday, building on positive momentum seen in the previous trading session.

Markets have been buoyed by data this week showing improved business sentiment in Germany and an uptick in eurozone services and manufacturing activity.

The U.K.'s FTSE 100 index is expected to open 20 points higher at 7,760, Germany's DAX 80 points higher at 15,158, France's CAC up 32 points at 7,075 and Italy's FTSE MIB 94 points higher at 26,053, according to data from IG.

Earnings come from LVMH, STMicro, Diageo, Superdry and Banco Sabadell. Italian consumer confidence data for January will also be released.

— Holly Ellyatt

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