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Major European Markets Recover After Weak Start, Close Notably Higher

After a weak start and a subsequent rebound, the major European markets ended on a firm note on Thursday, as stocks rose in late afternoon trades.

Stocks recovered after a weak start, and after hovering around the flat line for the next few hours, rose in late afternoon trade to eventually close on a positive note on Thursday.

Surging new coronavirus cases in the U.S., and Wednesday's report from the International Monetary Fund that forecast a gloomy outlook for the global economy hurt sentiment earlier in the day. However, stocks gained some ground during the later part of the session amid cautious buying at some top counters from across various sectors.

The market also tracked gains in the U.S. market where stocks recovered after US regulators eased restrictions on large banks' investments, allowing them to invest in riskier funds and to avoid building up cash safeguards against certain derivatives trades.

The pan European Stoxx 600 moved up 0.72%. The U.K.'s FTSE 100 gained 0.38%, Germany's DAX climbed 0.69% and France's CAC 40 jumped 0.97%, while Switzerland's SMI ended 0.68% up.

Among other markets in Europe, Austria, Belgium, Finland, Netherlands, Poland, Spain and Sweden closed on a firm note.

Czech Republic, Denmark, Greece, Ireland, Norway, Russia and Turkey closed weak. Portugal ended flat.

In the U.K. market, JD Sports Fashion, 3i Group, Schroders and Hargreaves Lansdown gained 3 to 4%. St. James, Bunzi, Prudential, Rentokil Initial, Anglo American, Vodafone, Antofagasta and AstraZeneca moved up 1.3 to 2.3%.

On the other hand, EasyJet tumbled 9.5%. Carnival, United Utilities, Rightmove, Centrica, Whitbread, Polymetal International, Hikma Pharmaceutical and Intercontinental lost 2.3 to 5.4%.

In France, WorldLine shares surged up more than 6%. Societe Generale, Cap Gemini, Bouygues, Credit Agricole, Michelin, ArcelorMittal, Renault, Essilor, Unibail Rodamco and BNP Paribas gained 2 to 3.5%.

Meanwhile, Accor, Publicis Groupe, Technip and Safran closed weak.

In the German market, Lufthansa climbed up nearly 7% as the European Commission approved Germany's 6 billion euros recapitalization of the German airline.

Deutsche Bank, Henkel, Merck, Daimler, Volkswagen, Continental, Thyssenkrupp, BMW, Adidas, Allianz and Fresenius Medical Care gained 1.5 to 3.2%.

Wirecard shares crashed more than 71% after the company filed for insolvency. Bayer shed about 3.1% and E. ON declined 1.6%.

In economic news, German consumer sentiment is set to recover next month reflecting the rapid reopening of the economy and society, survey results published by market research group GfK showed. The forward-looking consumer sentiment index rose to -9.6 in July from revised -18.6 in June. The score was forecast to rise moderately to -12.

Both economic and income expectations, as well as propensity to buy, increased in June. The economic expectations index rose 18.9 points to 8.5 points in June. Likewise, the income expectations indicator advanced 12.3 points to 6.6 points, while the propensity to buy indicator gained 13.9 points to 19.4 points.

UK retailers reported a steep fall in sales in June but stronger growth for grocers and stable volumes in the specialist food and drink sector ensured a slower pace of decline than in May, the Distributive Trades Survey data from the Confederation of British Industry showed.

According to the minutes of the June 4 meeting of the European Central Bank, policymakers of the bank observed that the government bond purchases under the pandemic emergency purchase programme, or PEPP, and asset purchase programme, or APP, were an effective tool in the current environment.

"There was broad agreement among members that while different weights might be attached to the benefits and side effects of asset purchases, the negative side effects had so far been clearly outweighed by the positive effects of asset purchases on the economy in the pursuit of price stability," the minutes said.

"Using the ECB's capital key as the benchmark was one of the safeguards helping to maintain incentives for sound fiscal policies," the minutes said.

At the meeting, the Governing Council of the ECB increased the size of PEPP by EUR 600 billion to a total EUR 1,350 billion and retained the size of the monthly purchases under APP at EUR 20 billion.

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