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European Markets Close Mostly Lower On Concerns Over Trade, Earnings

European markets closed mostly weak on Thursday, extending losses from previous session, as uncertainty about the progress in U.S.-China trade discussions and a few disappointing earnings reports weighed on sentiment and prompted traders to cut down on long positions.

The pan European Stoxx 600 ended lower by 0.22%. Germany's DAX declined 0.92% and the U.K.'s FTSE 100 shed 0.56%, while France's CAC 40 closed down by 0.38%. Switzerland's SMI ended 0.69% up, extending recent gains.

Among other markets in Europe, Austria, Belgium, Finland, Ireland, Netherlands, Norway, Portugal, Russia, Spain and Sweden ended weak.

Czech Republic, Greece, Iceland, Switzerland, Turkey and Ukraine closed higher, while Denmark and Italy ended flat.

In the UK market, Fresnillo tumbled more than 9%. Johnson Matthey declined by about 5%. Ashtead Group, BP, Sage, Intertek, TUI, Rio Tinto and BHP Group also declined sharply.

Shares of fashion giant Asos plunged sharply after the company said this year's profits are likely to be much lower than expectations.

On the other hand, British American Tobacc climbed up more than 6%. EasyJet rallied 4% after its third-quarter total revenue increased 11.4% from the year-ago period to 1.76 billion pounds.

Imperial Brands, Severn Trent, ITV, Centrica and Persimmon gained 1.5 to 2.3%.

In Germany, SAP declined more than 5% after reporting a 21% decline in second-quarter operating profit. The company also said that it does not expect a major improvement in margins before next fiscal.

Wirecard, Thyssenkrupp, Daimler, Volkswagen, Lufthansa and Continetal also ended notably lower.

French stocks ArcelorMittal, Dassault Systemes, Credit Agricole, Renault, Schneider Electric and Atos lost 1 to 2.6%.

Swiss drug maker Novartis moved up sharly on strong FY19 outlook. Shares of fragrance and flavor products manufacturer Givaudan tumbled after the company reported lower margins from recently acquired Naturex.

In economic news, UK retail sales recovered unexpectedly in June, rising 1% month-on-month, data from the Office for National Statistics showed. Sales were forecast to fall 0.3 percent after easing 0.6 percent in May.

Likewise, sales excluding auto fuel, expanded 0.9% after falling 0.4% each in May and April. Economists had forecast a 0.2% drop for June.

On a yearly basis, growth in retail sales accelerated to 3.8% from 2.2% in May. The rate also exceeded the expected rate of 2.6%.

Switzerland's exports decreased marginally in June amid a faster growth in imports, data from the Federal Customs Administration showed. Exports dropped by real 0.1% on month in June, but slower than the 0.4% decrease logged in May. Meanwhile, growth in imports improved to 1.4% from 0.8% in May.

In nominal terms, exports were up 8.5% in June, while imports fell 0.8% from previous month. As a result, the trade surplus rose to CHF 3.25 billion in June from CHF 1.5 billion in the previous month.

Separate data from the Federation of the Swiss Watch Industry showed that watch exports logged a double-digit decline of 10.7% in June. The first half of 2019, however, ended with an increase of 1.4%.

On the trade front, China seems to be hardening its stance on trade talks with the U.S. this week with the addition of Zhong Shan. Shan, who is a member of the Ministry of Commerce, told the People's Daily that China needed to "stand firm" in defending its interests and people, "as well as the multilateralism trading system."

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