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European Markets Gain Ahead Of Trade Talks

European stock markets ended with solid gains on Monday, with investors picking up shares ahead of a fresh round of U.S.-China trade talks. Some bargain hunting after recent steep losses too contributed to the gains.

The pan European Stoxx 600 gained 0.9%. Among major markets in Europe, France, Germany and the U.K., all ended on a bright note. While Fance's CACX 40 gained 1.06%, Germany's DAX and the U.K.'s FTSE 100 ended higher by 0.9% and 0.99%, respectively. Switzerland's SMI gained 0.72%.

Among other markets in Europe, Turkey gained nearly 2%. Italy gained 1.2%

Sweden, Spain, Netherlands, Norway, Greece, Finland and Denmark ended higher by 0.5 to 1%.

Russia ended modestly higher. Portugal and Poland edged up marginally and Czech Republic ended flat, while Austria ended weak.

Shares of Italian lender Banco BPM surged up nearly 7%, spearheading the rally in the banking space, on news that the capital positions of certain banks are higher than the levels required by the European Central Bank.

In the U.K., stocks gained despite weak GDP data. A weak pound sterling aided the market's surge.

According to a report from the Office of National Statistics, the UK economy expanded at its slowest annual rate in six years in 2018, following a sharp contraction in December.

In 2018, the economy grew 1.4%, down from 1.8% a year earlier. Growth in October - December 2018 slowed, falling to 0.2%, from 0.6% in the preceding quarter, due to Brexit uncertainty and slowing global economy.

Post release of the GDP data, the Pound Sterling weakened against the Euro and U.S. dollar, losing about 0.22% and 0.31%, respectively.

TUI AG, British American Tobacco and mining stocks BHP, Rio Tinto and Glencore had a good session.

Shares of Smith & Nephew declined sharply on reports the company is in discussions to buy NuVasive, a surgical instrments maker based in the U.S, in a deal estimated to be worth more than US$ 3 billion.

In the French market, Capgemini moved up sharply. Peugeot, Airbus Group, Atos and STMicroElectronics also surged higher.

The Bank of France today predicted a 0.4% growth for the French economy in the first quarter of this year, which is slightly faster than the 0.3% expansion in the final quarter of 2018.

The Bank of France survey showed that the business confidence indicator for the manufacturing industry fell to 99 in January from 102 in December.

The confidence measure for the services sector eased to 100 from 101, while the index for construction remained unchanged at 105.

The survey noted that business leaders expect industrial production and services activity to pick up in February. The construction sector is also expected to continue growth, notes the report.

In the German market, Deutsche Post gained more than 2% on reports the company might be given a higher than anticipated increase in postage for letters.

Deutsche Bank, Wirecard, Infineon, Allianz, Lufthansa and Covestro also posted solid gains.

On the trade front, U.S. Treasury Secretary Steven Mnuchin and other key officials are scheduled to be in Beijing later in the week to continue trade negotiations.

In Brexit news, responding to Jeremy Corbyn's letter that set out his demand for a Brexit deal, British Primer Minister Theresa May said she welcomed more talks with Labour on a Brexit agreement, especially on how alternate arrangements to the Irish backstop could work.

May wrote, "It is good to see that we agree that the UK should leave the European Union with a deal and that the urgent task at hand is to find a deal that honours our commitments to the people of Northern Ireland, can command support in Parliament and can be negotiated with the EU - not to seek an election or second referendum."

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