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European Markets Recover After Weak Start, Close On Strong Note

Despite a weak start, European markets ended on a firm note on Wednesday, as investors picked up stocks amid optimism about economic recovery.

It was a weak start for most of the markets across Europe due to a report that doubted Moderna Inc's claim about the positive results of a potential coronavirus vaccine.

However, they gained in strength as the session progressed, with investors picking up stocks amid optimism the economies will start recovering thanks to reopening of businesses.

Investors also noted reports about divisions in the EU regarding the Recovery Fund. The Austrian Chancellor Kurz said on Tuesday that a group of European Union states will present a counter-proposal to the Franco-German coronavirus Recovery Fund.

The pan European Stoxx 600 climbed up 0.98%. The U.K.'s FTSE 100 ended up 1.08% and Germany's DAX advanced 1.34%, while France's CAC 40 and Switzerland's SMI moved up 0.87% and 0.27%, respectively.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Russia and Spain all ended on a strong note with their benchmark indices gaining 0.8 to 2.5%. Turkey edged up marginally, while Sweden closed slightly weak.

In France, Renault rallied 6.5%. Societe Generale ended nearly 3% up. Dassault Systemes Group, Legrand, Publicis Groupe, LO'real, BNP Paribas, Orange, Airbus, Atos and STMicroElectronics gained 1.3 to 2.5%.

Technip shares plunged 6%. Michelin, the other prominent loser in the CAC 40 index, ended down 1.75%.

In the German market, Fresenius surged up 7.2%. Infineon Technologies, Wirecard and Deutsche Bank moved up 4 to 4.2%.

Daimler, Fresenius Medical Care, Linde, Covestro, Deutsche Post and SAP were the other prominent gainers.

In the U.K. market, Experian moved up 7.7% and DCC ended up 6%. Ashtead Group, Rightmove, Rolls-Royce Holdings, Mondi, Ocado Group, Compass, Antofagasta, Intertek, Royal Dutch Shell, Anglo American and RSE gained 2 to 4%.

Rolls-Royce Holding shares ended weak after the company announced plans to cut 9,000 jobs - almost a fifth of its global workforce - to make annual cost savings of 1.3 billion pounds.

Shares of Norwegian Air Shuttle ASA plunged sharply after the low-cost carrier said it will get 3 billion kroner ($290 million) in loan guarantees from the government as part of a restructuring plan.

In economic news, the euro area current account surplus decreased to a seasonally adjusted EUR 27.3 billion from EUR 38 billion in February, according to the data released by European Central Bank. This was the lowest since December 2019.

The surplus on trade in goods rose to EUR 32 billion in March from EUR 31 billion in February, while that in service decreased to EUR 2 billion from EUR 5 billion.

Final data from Eurostat showed Eurozone iInflation slowed to 0.3% from 0.7% in March. The rate was revised down from 0.4% estimated on April 30. This was the lowest since August 2016.

Headline inflation remained well below the European Central Bank's target of "below, but close to 2%."

According to a report from the Office for National Statistics, consumer price inflation in the U.K. eased to 0.8% in April from 1.5% in March. Economists had forecast the rate to ease to 0.9%. The latest rate was lowest since August 2016.

Core inflation that excludes energy, food, alcoholic beverages and tobacco, slowed to 1.4% in April from 1.6% in March.

On a monthly basis, consumer prices dropped 0.2% after remaining flat in March. Prices were forecast to drop 0.1%.

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