LONDON — European stocks started the final session of 2023 higher, marking a positive end to a solid year.

The regional Stoxx 600 index was up 0.26% in mid-morning trade, with all sectors in the green. Thin trade is expected, while London markets close early.

Spanish pharmaceutical group Grifols was the biggest stock mover, climbing 8.9% after announcing it will sell a 20% stake in Shanghai RAAS, a blood products firm, to China’s Haier for approximately $1.8 billion.

The blue-chip benchmark Stoxx is set to have gained more than 12% in 2023, according to LSEG data, just about reversing its 2022 loss.

Germany’s DAX has risen nearly 20% despite the country’s gloomy economic picture, while France’s CAC 40 and the U.K.’s FTSE 100 have gained 16.3% and 3.64%, respectively.

In the U.S., the S&P 500 index is chasing a new record high to cap off the rally of the last two months.

Latest data releases, including Thursday’s on jobless claims, continue to suggest U.S. economic growth is slowing without grinding to a halt. Market bets currently place a 72.8% probability on the Federal Reserve beginning rate cuts as soon as March 2024, CME’s FedWatch shows.

In the final readings of the year, U.S. annual headline inflation had slowed to 3.1% in November from 6.4% in January.

That compared with a drop to 2.4% from 8.5% in the euro zone, and to 3.9% from 10.1% in the U.K. — both of which have also fueled expectations of rate cuts next year amid sharp economic slowdowns in both economies.

“The apparent loss of U.S. economic momentum in late 2023 suits the view that the full impact of aggressive US Federal Reserve rate hikes may still be in the pipeline,” economists at Berenberg said in a note Friday.

“Nevertheless, the Fed remains on track to pull off the usually elusive feat of a soft landing in 2024. The easing of underlying inflation has encouraged bond and equity markets to play the Fed pivot theme,” they added, though they do not expect the first cut until May 2024.

Data on Spanish inflation will be released on Friday.

U.K. house prices recorded a 1.8% fall in the year to December, according to lender Nationwide, a bigger drop than recent polls suggested but significantly lower than calls made for a fall of up to 10% earlier in 2023.

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LONDON — Stocks are heading for a bumper week, but there are many reasons to be wary, one strategist warned on Friday.

“In short, we don’t believe this rally,” Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, told CNBC’s “Squawk Box Europe.”

“We had tough later part of summer, there was focus on tightening of financial conditions, what was coming from the key central banks.”

“Nothing has changed in a fundamental manner. So we still think that we are going to see more problems ahead as this higher for longer rates profile beds in and starts to impinge on the real economy,” Ahmed said.

The pan-European Stoxx 600 index is on course for its best weekly performance since late March, according to LSEG data. That comes off the back of a dire October, which was its worst month of the year, and losses in August and September.

Stateside, the Dow Jones Industrial Average notched its best day since June on Thursday.

Along with equities, U.S. and European government bonds have also rallied this week as investors interpreted the Federal Reserve’s rate hold and surrounding commentary as a sign that rates have peaked and cuts are within view. That was despite Fed Chair Jerome Powell’s insistence that further hikes were not off the table — in line with central bank heads in the U.K. and European Union.

“If you look at Chair Powell’s speech, it had a hawkish bias to it,” Ahmed said.

Markets are focusing on the sharp increase in long rates, which is helping the Fed tighten financial conditions — but a hot jobs print on Friday and another sticky print on inflation could well force it to implement another hike, Ahmed added.

Novartis on Wednesday completed the spinoff of its generics and biosimilars business Sandoz, whose shares began trading at 24 Swiss francs in the early minutes of the company’s debut on the SIX Swiss Exchange.

The Swiss drugmaker initially announced intentions to spin off the business in August, offering stakeholders one Sandoz share for every five Novartis shares via a dividend-in-kind distribution.

Narasimhan told CNBC that the company had accelerated its efforts over the last six years to “focus Novartis as a pure play innovative medicines company.”

Pure play companies refer to entities that target a single product or industry sector.

“Over the last six years, we’ve done over $100 billion of transactions. We exited consumer health to create one of the largest consumer health companies, exited Alcon in the largest public market spin in European capital markets, we exited our Roche stake,” Narasimhan told CNBC’s Julianna Tatelbaum.

“Now we spin [off] Sandoz, and what is left now is really where I think Novartis is best suited to succeed in the long run — a pure play innovative medicines company focused on bringing R&D efforts and the new medicines we create to markets around the world.”

Novartis shares climbed more than 3% in early trade in Zurich to lead the pan-European Stoxx 600 index.

Novartis also reiterated its full-year guidance, with sales expected to grow in a high single-digit percentage and with core operating income set to grow in the low double digits to mid-teens.

In a statement alongside the Wednesday announcement, Narasimhan said this was a “truly historic moment for Novartis and Sandoz” as they begin life as independent companies.

“With several consecutive quarters of sales growth, Sandoz starts out from a position of strength as a global leader in Generics and Biosimilars, and I am confident they are poised to deepen their impact on patients and society,” he added.

Jefferies analysts have valued the Sandoz listing at between $12.3 billion and $16.2 billion, when the company begins trading on Wednesday.

Sandoz CEO Richard Saynor also on Wednesday told CNBC that the spinoff would help his company focus its own strategy, which includes a pipeline of 25 biologics projects, with five more set to launch over the next two years.

“Ultimately, it’s about focus. Sandoz is the world’s largest generics and biosimilars company, and now, by becoming an independent company, we can focus on how we grow that business, how we bring more products to patients, and really continue to build on the momentum that we’ve created over the last couple of years,” Saynor told CNBC on Wednesday.

Saynor said the company’s broad aims are to continue to build on the sales momentum of the last seven quarters, expanding the profit margin over the next few years and driving free cash flows.

Around half of Sandoz revenues come from Europe, which Saynor said gives the company a “huge platform to grow.”

“We’ve invested heavily in our biologics pipeline, so, as we sit here today, we have 25 projects in our pipeline, and we’re in the process of launching about five over the next two years,” Saynor said.

“We’ve guided [that] around $3 billion of sales will come from our new pipeline, which is more than twice what we’ve seen over the previous five years, and we’re expecting half to come from biosimilars and half of the growth in total will now come from North America, so we’ll see the U.S. business starting to accelerate over the next few years.”