European Markets Close Higher On Trade Deal Hopes



European markets ended higher on Thursday, after positive comments by U.S. President Donald Trump about a potential trade deal with China lifted sentiment.


Investors also reacted positively to the U.S. Federal Reserve's monetary policy announcement. The Fed held rates unchanged on Wednesday but said rates would remain accommodative, although there would be possibly no hikes next year.


The markets also digested the European Central Bank's monetary policy statement and tracked the developments in the U.K. where voting is underway in the general election.


The pan European Stoxx 600 ended up 0.33%. The U.K.'s FTSE 100 gained 0.79%, Germany's DAX gained 0.57% and France's CAC 40 advanced 0.4%, while Switzerland's SMI closed higher by 0.44%.


Among other markets in Europe, Austria, Czech Republic, Finland, Italy, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkey closed with sharp to moderate gains.

Netherlands, Greece, Denmark and Belgium closed with modest gains, while Ukraine ended weak.


In the U.K. market, Standard Chartered, Prudential, Hargreaves Lansdown, Glencare, Anglo American Plc, HSBC, WPP, RSA Insurance, St. James Plance, DS Smith, Direct Line Insurance, BAE Systems, Legal & General and Micro Focus gained 2 to 4%.


Severn Trent, United Utilities, Hikma Pharma, Ferguson, Associated British Foods, Coca Cola and Berkeley ended notably lower.


In France, Technip gained nearly 4%, ArcelorMittal advanced 3.4% and Societe Generale closed stronger by nearly 3%. Renault, BNP Paribas, Peugeot, Credit Agricole and STMicroElectronics gained 2 to 2.7%.


In the German market, Deutsche Bank gained 3.4%. Covestro and Infineon both ended stronger by nearly 2.5%. Wirecard, Continental, HeidelbergCement, Linde and Bayer gained 1 to 1.6%.


Shares of infrastructure group Balfour Beatty rallied sharply after the company issued a solid trading update covering the period to 11 December 2019.


Serco Group shares moved higher after the company forecast higher underlying trading profit for fiscal 2019.


The European Central Bank left its key interest rates, asset purchases and forward guidance unchanged on Thursday, in the first policy session chaired by the new chief Christine Lagarde.


The Governing Council decided to hold the refi rate unchanged at a record low 0%, the deposit rate at -0.50% and the marginal lending rate at 0.25%. The move was in line with economists' expectations.


The ECB's new chief Christine Lagarde said after the policy meeting that her style of communication cannot be compared to her predecessors as she revealed that a planned strategic review of the bank's monetary policy is set to begin in January and complete by the end of the year.


Before taking questions from reporters in her first post-decision press conference, the former IMF managing director told them, "Don't over-interpret, don't second-guess, don't cross-reference. I am going to be myself and therefore probably different."


In other economic news from Europe, UK house prices declined at the fastest pace since April as uncertainties from Brexit and general election weighed on the property market, survey data from the Royal Institution of Chartered Surveyors, or RICS, showed.


Germany's inflation rate remained stable, as initially estimated, in November at its lowest level since early 2018, final data from the Federal Statistical Office showed.


France's consumer price inflation rose for the first time in five months in November, final data from the statistical office INSEE confirmed.


In Switzerland, producer and import prices declined at a faster-than-expected rate in November, with prices falling 2.5%, data from the Federal Statistical Office showed.


Switzerland's central bank retained its policy rate and interest on sight deposits at the SNB at -0.75 percent on Thursday. The decision came in line with expectations.


In trade news, Trump tweeted this morning that the U.S. is "Getting VERY close to a BIG DEAL with China. They want it, and so do we!"


Trump has repeatedly expressed optimism about a trade deal but has previously suggested China wants to reach an agreement more than the U.S.




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