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European Markets Close Higher On Trade Deal Optimism

European markets ended higher on Thursday, with several stocks hitting four-year highs, on reports the U.S. and China have agreed to remove existing tariffs on each other's goods in phases.

Comments from China's Commerce Ministry spokesman Gao Fend about the two countries agreeing to cancel additional tariffs in phases helped offset the negative sentiment generated by recent report from Reuters that said a meeting between the U.S. President Donald Trump and Chinese Premier Xi Jinping could be delayed until December.

The pan European Stoxx 600 ended up 0.37%. Among the major markets in Europe, the U.K. ended marginally up with its benchmark FTSE 100 edged up 0.13%. Germany's DAX ended stronger by 0.83% and France's CAC 40 advanced 0.41%, while Switzerland's SMI edged up 0.08%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Russia, Spain and Turkey ended with sharp to moderate gains.

Iceland ended weak, while Sweden and Ukraine edged up marginally.

In the U.K. market, Informa, Admiral Group, Burberry Group, Bunzi and Flutter Entertainment gained 1.7 to 2.3%.

Hiscox plunged nearly 10% as worries grew about the scale of claims the company is facing in the US.

In Germany, Lufthansa rallied more than 6%. The airline confirmed its FY19 view after posting a 4 percent rise in third-quarter net result.

Siemens gained about 5%. Infineon advanced 4.1%, Adidas gained about 3%, Covestro, Volkswagen and Daimler ended higher by 2.2 to 2.7%, while Continental, Deutshe Bank, Fresenius, Deutshe Post and BMW gained 1.2 to 1.8%.

On the other hand, HeidelbergCement declined 4.4% on weak results, RWE ended down 3.7% and Deutsche TeleKom shed about 2%.

In the French market, ArcelorMittal gained more than 6.5% and Sodexo advanced 5.8%. Credit Agricole, BNP Paribas, Societe Generale, AXA, Renault, ATOS, STMicroElectronics, Accor, Technip and Publicis Groupe also ended sharply higher.

In economic news, The European Commission downgraded its growth projections for the euro area as the economy faces a period of very high uncertainty.

In the Autumn forecast, the EC said that the European economy has entered a protracted period of subdued growth amid weak global growth, trade tensions and uncertainties over Brexit.

The single currency bloc is forecast to expand 1.1% this year instead of 1.2% estimated previously. Growth is seen at 1.2% each in 2020 and 2021. The outlook for 2020 was downgraded from 1.4%.

Inflationary pressures are set to be more moderate than expected in spring, lowering the inflation forecast for 2019 and 2020 to 1.2%, followed by slight uptick to 1.3% in 2021, the commission said.

The Bank of England maintained its key interest rate unchanged on Thursday. Seven members of the Monetary Policy Committee voted to maintain the bank rate at 0.75%, while two members preferred a quarter-point reduction.

The committee led by Governor Mark Carney unanimously decided to retain the stock of corporate bond purchases at GBP 10 billion and government bond purchases at GBP 435 billion.

The committee judged that the existing stance of monetary policy is appropriate. The bank projected GDP growth to pick up from 1% in the fourth quarter of 2019 to 1.6% by the end of 2020, and 1.8% by the end of 2021, and 2.1% in 2022.

In the MPC's latest projection, the level of GDP ends the forecast period around 1% lower than in August.

Data from Destatis showed German industrial production fell 0.6% month-on-month in September, reversing a 0.4% rise in August. Economists had forecast a moderate drop of 0.3%.

U.K. house prices dropped at a slower pace in October, data from the Lloyds Bank subsidiary Halifax and IHS Markit showed. House prices fell 0.1% in October from the previous month, when prices were down 0.4%.

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