European markets close lower as investors monitor geopolitics and UK budget

European stocks extended the week's losses as the Stoxx 600 index provisionally closed down 0.5%.

The technology sector posted gains of 0.3%, but all others were either flat or in negative territory. Mining stocks fell 1.8% to lead losses, while retail stocks dropped 1.5% and oil and gas stocks dropped 1.2%.

— Jenni Reid

Sterling was trading around 1.1% lower against the U.S. dollar at $1.1777 during late afternoon deals in London.

It comes shortly after U.K. Finance Minister Jeremy Hunt unveiled a fiscal plan involving £30 billion ($35.3 billion) in spending cuts and £25 billion in tax hikes.

Hunt said it was a bid to restore Britain's economic credibility and give "the world confidence in our ability to pay our debts" after a widely-condemned mini-budget rocked financial markets.

The U.K.'s independent Office for Budget Responsibility predicted real household disposable income would fall by 4.3% in 2022-23, the largest single-year decline since records began in 1956-57.

Yields on 10-year and 30-year U.K. bonds, known as gilts, inched higher in the wake of the announcements. Meanwhile, short-dated gilts rose by 10 basis points. Yields move inversely to prices.

— Jenni Reid

Germany's Siemens and British Gas owner Centrica were the top performers in afternoon trading, gaining 6.4% and 5.6%, respectively.

Shares of Centrica rebounded after dipping on news that the U.K. will increase its windfall tax on energy firms from 25% to 35%.

However, food delivery stocks wilted, with Berlin-based meal-kit firm HelloFresh losing 8% and grocery service Ocado down 9.5%.

The Ocado fall followed an analyst note from Kintbury Capital which forecast a 50% downside for the stock.

— Jenni Reid

The U.K. is now in recession, according to statistics from the Office for Budget Responsibility, announced by Finance Minister Jeremy Hunt.

Hunt said "difficult decisions" would be made to tackle inflation amid the cost-of-living crisis.

— Hannah Ward-Glenton

Sterling fell in value as U.K. Finance Minister Jeremy Hunt delivered an autumn fiscal statement.

The currency dipped as much as 0.69% against the dollar as Hunt announced tax increases for high earners and a temporary levy on electricity generators.

— Hannah Ward-Glenton

Shares of Siemens climbed after the company beat analyst expectations by raising its dividend on fourth quarter earnings. The move was driven by increased profit across all of Siemens' industrial businesses and has prompted a 7% increase in share price.

Financial services company NN Group shares have tumbled 6% after the organization posted 2025 targets that were below expectations. The Dutch insurer also maintained its buyback policy.

— Hannah Ward-Glenton

Russia's war on Ukraine is the "single most important negative factor" for the world economy this year — and most likely for 2023 as well, IMF chief Kristalina Georgieva told CNBC on Wednesday. 

Speaking on the sidelines of the Group of 20 meeting in Bali, Indonesia, Georgieva commented on the missile that struck Polish territory late Tuesday, which killed two civilians. 

While she applauded the G-20 members' draft declaration that condemned Russia's aggression against Ukraine, Georgieva said that the focus of the summit has been "very pressing problems" — such as global inflation, rising costs of living, food and energy security.

"I was listening very carefully to all the statements and it's encouraging that these are the issues we are focusing on — as we must," she said.

The IMF previously issued warnings on the fragmentation of the global economy due to the war, and slashed 2023 growth forecasts from an expected 3.2% in 2022 to 2.7%.

Read the full story here.

—Goh Chiew Tong

It has been a brutal year for tech, as markets flee growth stocks amid rising rates and other headwinds.

The tech industry has also been hit by layoffs. With inflation figures rising less than expected, however, Big Tech stocks rallied last week on investor hopes that a peak could be in sight.

Should investors get back into tech at all, or is it too soon? Here's what Citi and other pros said.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Fidelity says the notion that a pivot from the Federal Reserve's hawkish stance will benefit equities is "dead."

Salman Ahmed, global head of macro and strategic asset allocation at the investment management firm, said he is concerned about short-term stock performance and suggests investor consider a different asset class instead.

Subscribers can read more here.

— Ganesh Rao

Good morning from London, and welcome to CNBC's live blog covering all the action and business news in European financial markets on Thursday.

Futures data from IG suggests a generally positive open for European indexes, with London's FTSE 100 seen opening 0.15% higher, France's CAC 40 and Germany's DAX are seen opening around the flatline, and Italy's FTSE MIB slightly higher.

The pullback in sentiment among European bourses comes ahead of the latest indicator of the state of health of major regional economies, with gross domestic product readings from the U.K. and European Union on Thursday.

European markets had ended the day higher on Wednesday, with the pan-European Stoxx 600 index rising 0.55% after the S&P 500 and Nasdaq Composite rallied to new records yesterday. Investors are gearing up for more inflation data to assess the state of the U.S. economy.

The producer price index, due Thursday, will be significant factors in the direction interest rates take at the Federal Reserve's next meeting in September.

— Holly Ellyatt