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European Markets End Mostly Higher On U.S.-China Trade Deal Hopes

European markets ended mostly higher on Wednesday amid optimism about a U.S.-China trade deal and on reports that another government shutdown in the U.S. is unlikely.

The pan European Stoxx 600 ended 0.6% up. Among the other major indices in Europe, the U.K.'s FTSE gained 0.81%, Germany's DAX ended 0.37% up and France's CAC 40 finished 0.35% up. Switzerland's SMI advanced 0.4%.

Among other markets in Europe, Italy ended nearly 1% up. Norway gained about 1.35%. Belgium, Finland, Netherlands and Sweden closed modestly higher.

Czech Republic and Greece edged up marginally. Spain ended flat, while Poland, Portugal, Turkey and Russia ended notably lower. Austria and Iceland ended slightly weak.

ABN Amro declined nearly 8% after the bank's fourth quarter results fell short of expectations.

German stock Osram Licht gained more than 14% after the company said it was in talks with Bain Capital and Carlyle Group over a potential joint takeover.

Continental, HeidelbergCement, Daimler, Linde, Merck, Infineon, Covestro, Bayer and SAP were among the other notable gainers in the German market.

Wirecard shares declined nearly 5% and Thyssenkrupp ended 4.5% down.

In France, ArcelorMittal, Kering, Accor, Capgemni, Atos, Technip, Airbus Group and Valeo gained 1.5 to 4%. Dassault Systemes, Essilor, Safran, Sodexo and BNP Paribas also closed with solid gains.

In the U.K. market, TUI shed more than 6% as results continued to weigh on the stock. Tesco ended nearly 2% down.

Babcock International, Coca Cola, Rolls-Royce, Antofagasta, Whitbread, BHP Group, British American Tobacco, Sage, Glencore and 3I Group ended higher by 2 to 4%.

In economic news, Eurozone industrial production decreased for a second straight month and at a faster-than-expected pace in December, but the fall was less severe than the previous month's decline.

Data released by Eurostat showed eurozone industrial production fell 0.9% in December percent from November, when it decreased 1.7%. Economists had expected a 0.4% decline.

Compared to a year ago, production shrunk 4.2% last month, after a 3% decline in November. Economists had forecast a 3.3% fall.

In 2018, industrial production rose an average 1.1 percent in the euro area.

UK consumer prices rose at the slowest pace in two years in January led by lower oil prices, and fell below the Bank of England's target, while core inflation remained steady.

The consumer price index rose 1.8% year-on-year following a 2.1% increase in December, figures from the Office for National Statistics showed Wednesday. Economists had expected 2% inflation.

Core inflation was steady at 1.9% at the start of the year, in line with economists' expectations.

Investors were hoping that upcoming high level discussions between U.S. and Chinese officials could result in some positive developments on the trade front.

Markets also reacted positively to reports that U.S. President Donald Trump is likely to sign a Congressional spending package on a border security agreement.

On Tuesday, Trump said he was not pleased with a tentative agreement reached by the lawmakers, but stopped short of saying he would reject the plan.

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