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European Markets Dropped After Wall Street Sell-Off

The European markets opened significantly lower Wednesday and remained in a sideways pattern throughout the session. The sharp sell-off on Wall Street yesterday had a negative impact on investor sentiment.

Traders were also concerned that the initial positive reaction to the trade truce reached by the U.S. and China at the G20 summit over the weekend was overdone. There is skepticism and confusion about the truce after China promised action but gave no details on the tentative truce.

Brexit-related uncertainty also contributed to the negative mood after Theresa May's government suffered three successive defeats in the British Parliament on Tuesday.

Markets on Wall Street are closed Wednesday due to a national day of mourning for former U.S. President George H.W. Bush.

The pan-European Stoxx Europe 600 index weakened 1.16 percent. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 1.22 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 1.53 percent.

The DAX of Germany dropped 1.19 percent and the CAC of France fell 1.36 percent. The FTSE 100 of the U.K. declined 1.44 percent and the SMI of Switzerland finished lower by 1.60 percent.

In Frankfurt, Deutsche Bank slid 0.06 percent after reportedly settling a probe into controversial tax deals.

Daimler finished lower by 0.89 percent on a Bloomberg report that it is considering boosting its stake in a joint venture with Chinese partner BAIC Motor Corp.

In Paris, Air France KLM declined 0.54 percent after the leader of its pilots' union lost his bid for re-election.

In London, Shire Plc rallied 3.09 percent after Japan's Takeda Pharmaceutical Company announced that its shareholders approved resolutions related to the proposed acquisition of the U.K drug-maker.

Eurozone retail sales grew in October after decreasing in the previous month, preliminary data from Eurostat showed on Wednesday. Retail sales grew 0.3 percent from September, when they fell 0.5 percent, after the stagnation reported earlier was revised. Economists had forecast a 0.2 percent increase for October.

Eurozone's private sector growth was the lowest in more than two years during November, led by Germany, though the pace of slowdown was less than what was estimated initially. The final Eurozone Composite purchasing managers' index fell to 52.7 from October's 53.1, survey data from IHS Markit showed on Wednesday. The figure was slightly higher than the flash estimate of 52.4.

UK services sector growth slowed to its weakest level in nearly two-and-a-half years in November, amid weaker growth in both business activity and new work as Brexit concerns intensified, defying expectations for a modest improvement.

The CIPS UK Services purchasing managers' index, or PMI, fell to 50.4 from 52.2 in October, marking the lowest level since July 2016, survey results from IHS Markit showed on Wednesday. Economists had forecast a score of 52.5.

The services sector in China continued to expand in November, and at a greatly accelerated rate, the latest survey from Caixin revealed on Wednesday with a PMI score of 53.8. That beat expectations for 50.8, which would have been unchanged from the October reading. It also moves further above the boom-or-bust line of 50 that separates expansion from contraction.

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