This is CNBC's live blog covering European markets.
European markets were lower on Friday as investors monitored political turmoil in the U.S. and monetary policy decisions from various major economies.
The pan-European Stoxx 600 index was 1.7% lower by 1:46 p.m. London time, with every sector and all major bourses in negative territory.
The United States was plunged into fresh political uncertainty on Thursday evening, after the failure of a Trump-backed spending bill, whose passage would have prevented a government shutdown. Dozens of Republican lawmakers voted against the deal to fund the government for three months and suspend the U.S. debt ceiling for two years, meaning a partial government shutdown will commence on Friday night.
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Meanwhile, U.S. president-elect Donald Trump issued a fresh trade threat to the EU, floating on social media the possibility that he would impose new tariffs on the bloc unless it purchased more oil and gas from the United States.
Elsewhere, China held its key interest rates steady Friday, in line with expectations. The move came in the same month that Beijing's top officials vowed to ramp up policy easing measures.
The latest development from the People's Bank of China arrived in the same week as monetary policy updates from the Federal Reserve and the Bank of England. On Wednesday, the Fed announced a 25-basis-points cut to its core interest rate, while the Bank of England held policy unchanged at its own Thursday meeting.
Money Report
While the Bank of England's decision was widely anticipated, a split in the vote and Governor Andrew Bailey's comments about the economic impact of the newly elected Labour government's budget rattled markets, sparking a dip in the value of the British pound and yields on Britain's 10-year Gilts to tick higher.
Russian policymakers are set to update their monetary policy on Friday.
The U.K.'s retail sales for November, France's November Producer Price Index, and the current state of consumer confidence in Italy will also be released on Friday.
— CNBC's Christina Wilkie, Sonia Heng and Anniek Bao contributed to this European markets summary.
Volkswagen shares gain 2%
In an overwhelmingly gloomy trading session for European stocks, German carmaker Volkswagen's shares bucked the trend to gain more than 2% by 1:30 p.m. London time.
The stock's rise followed reports that Volkswagen was making progress in ongoing negotiations with its striking workers in Germany. People familiar with the matter told CNBC that talks were heading in the right direction, but no deal had been reached.
— Chloe Taylor
Bitcoin falls 8%
Bitcoin dipped below the $93,000 mark earlier on Friday before ticking higher again in volatile trade.
By around 8:26 ET, bitcoin was trading at $93,809.39, according to Coin Metrics, down around 8% from 24 hours before when it was priced above $102,000.
The move comes after the cryptocurrency topped the $100,000 threshold earlier this month to much fanfare. It hit a record high of more than $108,000 earlier this week.
— Chloe Taylor and Arjun Kharpal
Novo Nordisk stock nosedives
Novo Nordisk stock plummeted on Friday, after results from a trial of its CagriSema weight loss drug missed expectations, according to Reuters.
Shares of the Danish pharmaceutical giant, which manufactures weight loss drug Wegovy, were on course for their worst-ever daily loss, shedding more than 18% by 11:33 a.m. London time.
— Chloe Taylor
Russia keeps key interest rate at 21%
Russia's central bank on Friday held its key interest rate steady at 21%, with policymakers saying in a statement that monetary conditions had "tightened more significantly than envisaged by the October key rate decision."
The central bank forecast that inflation in Russia would drop to 4% by 2026. Annual inflation in the country stood at 8.9% in November, rising from 8.5% a month earlier. Sanctions in the wake of Russia's full-scale invasion of Ukraine, and a weaker ruble, have helped keep prices elevated.
The Russian ruble was trading around 0.7% lower against the U.S. dollar by 10:37 a.m. London time, at 102.80 per dollar.
— Chloe Taylor
British assets rocky
The British pound has had a volatile few days after data showed the U.K. economy contracted and inflation rose, while the Bank of England kept interest rates steady. Sterling was little changed against the dollar on Friday morning, after sustaining losses against the greenback on both Wednesday and Thursday. The British currency was trading at $1.2503 at 9:55 a.m. London time.
Meanwhile, yields on Britain's 10-year Gilt picked up to a fresh 52-week high on Friday, edging upward to 4.587%.
— Chloe Taylor
Zealand Pharma down 10%
Shares of Danish pharmaceutical firm Zealand Pharma tumbled to the bottom of the Stoxx 600 index on Friday morning, with the stock sliding 10% by 8:45 a.m. London time.
It came after the U.S. Food and Drug Administration (FDA) declined to approve glepaglutide, a drug manufactured by the firm, for use in the treatment of bowel disease. On Thursday, Zealand Pharma said it would continue talks with the FDA to try to obtain regulatory approval for the drug.
— Chloe Taylor
British retail sales up 0.5% in year to November
Retail sales volumes in Britain rose by an estimated 0.5% in the year to November, according to the U.K.'s Office for National Statistics.
In figures published on Friday, the ONS said sales growth among grocery retailers and other non-food stores were offset by a decline in clothing sales. The figures, which covered the four-week period ending Nov. 23, did not include data on this year's Black Friday sales.
On a monthly basis, sales volumes were up 0.2%, following a month-on-month fall of 0.7% in October.
— Chloe Taylor
President-elect Trump renews EU tariff threat
U.S. President-elect Donald Trump took to his Truth Social social media platform Friday to issue a threat to the European Union.
The euro was slightly higher against the greenback Friday morning, trading 0.1% higher at $1.0376 by 7:04 a.m. London time.
— Chloe Taylor
Opening calls
Here are the opening calls for European stocks on Friday.
The FTSE 100 is slated to open 110 points lower at 8,088, according to data from IG, while Germany's DAX is expected to lose around 400 points to 19,835 and the French CAC 40 is set to shed 140 points to 7,244.
— Chloe Taylor
CNBC Pro: Want to buy the dip in energy? Bernstein names a top pick with almost 50% upside
European utilities and clean energy had an underwhelming performance in 2024, but Bernstein sees bright spots within the sector to play in the year ahead.
"We have a bias towards companies loading up on the visible capex [capital expenditure] cycle in electricity networks," the investment bank's analysts wrote in a Dec. 9 note.
CNBC Pro subscribers can read more here.
— Amala Balakrishner
