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European Markets Rally After Trade War Truce Declared

The European markets ended the first session of the new trading week firmly in positive territory. Traders reacted positively to the news that U.S. President Donald Trump and Chinese President Xi Jinping agreed to a 90-day truce in the escalating trade war between the two countries over the weekend.
The news sparked a rally in shares of bank stocks, miners and automakers. Luxury goods companies also climbed on the news.

A White House statement said Trump agreed not to raise the tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent on January 1st as planned.

In return, China agreed to purchase a "not yet agreed upon, but very substantial, amount" of agricultural, energy, industrial, and other product from the U.S.

The White House said the U.S. and China will use the next 90 days to attempt to reach an agreement on issues such as forced technology transfer, intellectual property protection, and non-tariff barriers.

The pan-European Stoxx Europe 600 index advanced 1.04 percent. The Euro Stoxx 50 index of eurozone blue chip stocks increased 1.33 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.73 percent.

The DAX of Germany climbed 1.85 percent and the CAC of France rose 1.00 percent. The FTSE 100 of the U.K. gained 1.18 percent and the SMI of Switzerland finished higher by 0.76 percent.

In Frankfurt, BMW climbed 4.83 percent, Daimler rose 4.36 percent and Volkswagen advanced 2.60 percent after China agreed to slash auto import tariffs.

In London, Standard Chartered jumped 3.15 percent on a Bloomberg report that the bank is cutting jobs in Dubai and key markets including Singapore as it looks to curb expenses.

Drug major Novartis advanced 0.40 percent in Zurich after the U.S. FDA accepted its Biologics License Application for AVXS-101, now known as ZOLGENSMA, an investigational gene replacement therapy for the treatment of spinal muscular atrophy.

Eurozone's manufacturing growth slowed less-than-expected in November, amid marginal growth in output and weak business confidence, and was the lowest since August 2016, final data from IHS Markit showed on Monday.

The manufacturing purchasing managers' index fell to 51.8 from 52 in October. The flash reading was 51.5.

UK manufacturing growth improved in November, but activity remained subdued amid a second consecutive month of decline in export orders, though domestic demand increased as Brexit worries prompted clients to stock up on supplies.

The CIPS manufacturing purchasing managers index rose to 53.1 from October's 27-month low of 51.1, survey data from IHS Markit showed on Monday. Economists had forecast a score of 51.7.

The manufacturing sector in China accelerated slightly in November, the latest survey from Caixin revealed on Monday with a manufacturing PMI score of 50.2. That exceeded expectations for a score of 50.1, which would have been unchanged from the October reading.

Manufacturing activity in the U.S. unexpectedly grew at a faster rate in the month of November, according to a report released by the Institute for Supply Management on Monday.

The ISM said its purchasing managers index climbed to 59.3 in November after falling to 57.7 in October, with a reading above 50 indicating growth in manufacturing activity. Economists had expected the index to edge down to 57.5.

With a drop in spending on private construction more than offsetting an increase in spending on public construction, the Commerce Department released a report on Monday showing an unexpected dip in U.S. construction spending in the month of October.

The Commerce Department said construction spending edged down by 0.1 percent to an annual rate of $1.309 trillion in October after slipping by 0.1 percent to a downwardly revised rate of $1.311 trillion in September.

The modest decrease came as surprise to economists, who had expected construction spending to rise by 0.3 percent compared to the nearly unchanged reading originally reported for the previous month.

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