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European Markets Close Sharply Higher On Stimulus Optimism

European stocks ended on a high note on Tuesday, riding on U.S. Federal Reserve's extensive asset purchase scheme, and on hopes the U.S. Congress will eventually agree on the proposed near $2 trillion relief package that would help limit the economic impact of the COVID-19 pandemic.

A report from Italy that said the number of new cases due to coronavirus infection in the country dropped for a second day running, further aided sentiment in global stock markets today.

The pan European Stoxx 600 ended stronger by 8.4%. Among the major indices, the U.K.'s FTSE 100 spurted 9.05%, Germany's DAX climbed almost 11% and France's CAC 40 jumped 8.39%, while Switzerland's SMI gained 7.02%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Russia, Spain, Sweden and Turkey gained 5 to 9%. Iceland, Denmark and Poland also ended sharply higher, while Ukraine ended weak.

In the German market, all the DAX stocks ended in green. Daimler soared nearly 25%. Volkswagen and BMW gained about 19% and 13%, respectively.

Muench.Rueckvers climbed 19%. Allianz, Infineon, Wirecard, Lufthansa, Fresenius SE, Continental, Deutsche Post, HeidelbergCement, Linde, Deutsche Bank and Siemens gained 10 to 14%.

In France, Safran jumped nearly 21%. ArcelorMittal, AXA, Renault, Legrand, Total and Atos gained 14 to 20%.

STMicroElectronics, Publicis Groupe, Societe Generale, Schneider Electric, Saint Gobain, Capgemini, Sodexo, Peugeot, Kering and Essilor Exottica moved up 10 to 14%.

In the U.K. market, Carnival soared more than 28%, Royal Dutch Shell gained nearly 23%, BP zoomed 21.6% and Anglo American gained nearly 21%.

Cairn Energy, First Group and Georgia Capital ended stronger by 30.5%, 30.3% and 28.4%, respectively.

In economic news, the euro area private sector logged the sharpest decline on record in March as the coronavirus outbreak intensified, survey results from IHS Markit showed. The composite output index fell to 31.4 in March from 51.6 in February. This was the largest monthly fall in activity since data first collected in July 1998. The score was below the forecast of 38.8.

The services Purchasing Managers' Index declined to 28.4 from 52.6 in February, while the manufacturing PMI slid to a 92-month low of 44.8 from 49.2 in February.

Germany's private sector logged its biggest contraction since 2009, flash survey data from IHS Markit showed.

The composite output index plunged to 37.2 in March from 50.7 in February. This was the lowest score since February 2009 and also below economists' forecast of 40.6.

The sharp drop in activity was driven by the service sector, where businesses highlighted the impact of efforts to contain the spread of the coronavirus disease 2019, or covid-19.

The services Purchasing Managers' Index fell to a record-low 34.5 from 52.5 a month ago. The expected reading was 42.3.

The UK private sector logged its record decline in business activity in March amid emergency public health measures to contain the spread of coronavirus, a private survey showed.

The flash IHS Markit/Chartered Institute of Procurement & Supply composite output index fell to a record 37.1 in March from 53.0 in February. The reading was also below the forecast of 45.1.

According to Bank of England's Financial Policy Summary and Record, released Tuesday, the backdrop to the Committee's March meetings has been dominated by the outbreak and spread of Covid-19.

The FPC assessed that major UK banks are well able to withstand severe market and economic disruption. Also, household vulnerability is considerably lower than before the financial crisis.

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