European stocks close higher as positive momentum continues; UK GDP grows slightly

Erik Thedéen, Governor, Riksbank discusses the current macroeconomic environment and shares his reaction to spiking oil prices and Krone weakness.

Lorenzo Bini Smaghi, chairman of Société Générale, joins CNBC's Silvia Amaro during the IMF meetings to discuss his forecast on global inflation and the possibility of a soft landing.

Paschal Donohoe, president of Eurogroup, discusses the state of Europe's economy, saying there are reasons to be concerned but also signs of resilience.

Major stock indexes opened slightly higher on Thursday, after the latest consumer price index came out higher than expected.

• The S&P 500 was recently up about 0.1%, or 4.25 points.
• The Dow Jones Industrial Complex gained 0.1%, or 40.94 points.
• The tech-heavy Nasdaq inched higher by less than 0.1%, or 6.7 points.

— Pia Singh

The European Central Bank released the minutes of its September monetary policy meeting Thursday, showing that growth concerns, inflation risks and the possibility of no more interest rate hikes were all discussed.

ECB members "widely felt" that projections for economic recovery in 2023 were "too optimistic," the minutes said.

"Notably, it was maintained that the projections for consumption and investment seemed too optimistic at a time when the contribution of net trade to economic growth was close to zero," the statement said.

Renewed upward pressures on energy and food costs mean there are still upside risks to inflation, members said, with adverse weather condition able to push food prices up further than expected.

The minutes also revealed that while the decision to hike interest rates "was generally seen as a close call, a solid majority of members expressed support for the 25 basis point rate increase." The September rate hike brought rates to a record 4%, and "tactical considerations also played a role" in the decision, the minutes said.

There was no noteworthy shift in the euro following the release.

— Hannah Ward-Glenton

The U.S. consumer price index, a widely followed measure of inflation, rose 0.4% in September. That was higher than the Dow Jones consensus estimate for a 0.3% increase. It also rose 3.7% year over year, exceeding a 3.6% forecast.

So-called core CPI, which strips out volatile food and energy prices, was in line with expectations. It rose 0.3% month over month and 4.1% on a 12-month basis.

— Fred Imbert

The British pound was flat against both the U.S. dollar and euro at 12:40 p.m. London time, after GDP figures for August came in at the expected 0.2% growth.

Strategists have forecast a decline in sterling over the rest of the year as changing rate expectations and a weak economic growth outlook weigh.

In September it suffered its worst month against the dollar for a year, but the U.K. currency has staged a modest rebound since then, climbing 0.89% in the month to date, according to LSEG data.

— Jenni Reid

Pierre Wunsch, governor of the National Bank of Belgium, discusses the latest inflation figures and the trends the ECB is monitoring.

Oil prices were higher Thursday following a fall of over 2% on Wednesday as markets continued to assess the huge increase in volatility in the Middle East amid the Israel-Hamas war.

International benchmark ICE Brent Crude futures were up 0.93% to $86.62 a barrel at 9:23 a.m. in London, as WTI Crude futures rose 0.72% to $84.09 a barrel.

In its monthly report, the International Energy Agency on Thursday said oil markets would remain on edge over potential output disruption as the war persists.

It also said it "stands ready to act if necessary to ensure markets remain adequately supplied."

— Jenni Reid

European stock markets opened higher Thursday, with the Stoxx 600 index up 0.6% at 8:10 a.m. London time.

Germany's DAX gained 0.5%, while the U.K.'s FTSE 100 and France's CAC 40 were both around 0.6% higher.

— Jenni Reid

The U.K. economy expanded 0.2% month-on-month in August, the Office for National Statistics estimated Thursday, as growth in the dominant services industry offset declines in production and construction output.The ONS also revised its reading for July lower, from 0.5% to 0.6% contraction.

It comes after the International Monetary Fund forecast the weakest economic growth for the U.K. of all Group of 7 nations. It sees 0.5% growth this year, versus 0.7% in the euro zone and 2.1% in the U.S.

Ruth Gregory, deputy chief U.K. economist at Capital Economics, said August growth was partially down to temporary factors and reiterated a call for the economy to contract 0.2% quarter-on-quarter in both the third and forth quarters, resulting in recession.

The GDP reading does not change the outlook for the Bank of England, according to Mathieu Savary, chief European strategist at BCA Research, and "confirms that the Bank Rate does not have much upside from here, but will remain at current levels for an extended period."

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— Jenni Reid

European stocks are set to open higher, according to IG data.

The U.K.'s FTSE 100 was seen up 34.5 points at 7,656, with Germany's DAX up 74.5 points to 15,533. France's CAC 40 was set to gain 31.8 points at 7,173 and Italy's MIB up 182.5 points at 28,586.

— Jenni Reid

Exxon Mobil's acquisition of shale rival Pioneer Natural Resources is the largest oil and gas merger in a decade, and "one for the record books," says Raymond James' managing director and equity research analyst Pavel Molchanov.

On Wednesday, Exxon Mobil said it agreed to buy Pioneer Natural Resources for $59.5 billion in an all-stock deal, or $253 per share. The deal marks Exxon's biggest since it bought Mobil, and is expected to close in the first half of 2024.

While it's a "good deal" for Exxon from a historical valuation perspective, Molchanov noted that it's important to also recognize that Exxon's own stock has been trading at a much lower valuation than it used to.

Exxon estimated its production volume in the Permian Basin would more than double to 1.3 million barrels of oil equivalent per day.

"It's no coincidence that the Permian is the focus of his deal," said Molchanov, elaborating how it is the "most prolific and economically attractive basins."

Pioneer shares were up 1.44% at the close, while Exxon's slipped 3.58%.

—Lee Ying Shan, Fred Imbert

Data is set to play a big role in creating new products and services while boosting productivity, and three companies are well positioned to be "winners," according to Morgan Stanley.

The banks' analysts chose the stocks for offering structural mid-single-digit percentage growth, high and durable margins (with adjusted earnings before interest and taxes exceeding 25%), and high cash conversion with strong market positions.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

Semiconductors are looking undervalued, thanks to the selloff in some parts of the sector, according to Morningstar.

The research firm said in a report released on Oct. 11 that it views semiconductor stocks as 15% undervalued on a median price or fair value estimate basis as of Oct. 3. That's even more undervalued than the wider tech sector, which it believes is 5% undervalued.

It named its top stock picks in the sector.

CNBC Pro subscribers can read more here.

— Weizhen Tan