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European Markets End On Firm Note On Bank Merger Talks

European markets ended mostly higher on Monday, due largely to reports that Deutsche Bank and Commerzbank are in talks for a merger. Investors were also looking ahead to the vote on a Brexit deal by the U.K. lawmakers on Tuesday.

The pan European Stoxx 600 ended up 0.78% with almost all sectors posting solid gains. Among the major markets in Europe, the U.K. ended modestly higher with its benchmark FTSE 100 gaining 0.37%. Germany's DAX and France's CAC 40 ended higher by 0.75% and 0.66%, respectively. Switzerland's SMI gained 0.79%.

Among other markets in Europe, Belgium, Denmark, Estonia, Finland, Netherlands, Italy, Spain and Sweden settled on a firm note.

Austria closed notably lower. Czech Republic, Iceland, Russia and Turkey also ended weak, while Poland and Portugal ended flat.

Deutsche Bank jumped 5% amid reports that its top executives have agreed to hold discussions with rival Commerzbank AG about a potential merger. Commerzbank shares ended stronger by about 7.2%.

According to reports, the German government is said to be backing a tie-up between the two banks. The government owns a 15% stake in Commerzbank.

French stock Safran declined sharply, weighed by the crash of an Ethiopian Airlines Boeing 737 Max jet. Safran produces the engines used in the Max jets.

Norwegian Air Shuttle shares tumbled more than 6%, hurt by the crash on Sunday.

On the Brexit fron, the U.K. lawmakers' vote on Tuesday will decide whether Prime Minister Theresa May's deal will be accepted or not. It is widely speculated that May's deal will be rejected in parliament.

In economic news, Germany's industrial production unexpectedly decreased in January while exports were unchanged, underpinned mainly by demand from outside the European Union, preliminary data showed.

Industrial production decreased 0.8% month-on-month in January, while economists had predicted a 0.5% gain.

A 9.2% slump in the automobile industry influenced the January outcome, the Economy Ministry said.

The Bank of France revised its growth estimate for the first three months of the year to 0.3% from 0.4% predicted earlier.

The survey data from the bank showed that manufacturing business confidence improved to 101 in February from 99 in January.

The confidence indicator for the services sector was unchanged at 101 and that for construction was steady at 105.

Preliminary data from the statistical office INE said Spain's retail sales rose for a fourth straight month in January, rising a seasonal and calendar adjusted 0.8% year-on-year in January, after rising 0.6% each in November and December.

In other news from Europe, Norway's inflation dropped to a 7-month low and Denmark inflation slowed to the lowest level in two months. In Czech Republic, consumer price inflation rose 2.7% in February. Meanwhile, Turkey entered its first recession in a decade with its GDP falling by a seasonally and calendar adjusted 2.4% from the third quarter.

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