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European Stocks Recover After Early Setback, Close Mixed

European stocks recovered from their lower levels and ended on a mixed note on Tuesday.

Movements were choppy for much of the trading session with investors reacting to news indicating some progress on fresh stimulus efforts in the U.S., and reports showing spikes in coronavirus cases across the world and reimposition of lockdown measures in several countries.

Markets were also looking ahead to the U.S. Federal Reserve's monetary policy announcement, due on Wednesday. U.S. Senate Republicans on Monday proposed a $1 trillion coronavirus aid package that slashes unemployment benefits from the current $600 per week to $200, generating swift backlash from Democrats.

The proposal extends the paycheck protection program, which is scheduled to expire on August 8. Senate Majority Leader Mitch McConnell urged Democrats to compromise with Republicans on the plan, as unemployment benefits will expire at the end of this week.

News about the U.K. government's help to buy scheme being extended beyond December lifted sentiment in the British market.

The pan European Stoxx 600 ended up 0.42%. The U.K.'s FTSE 100 advanced 0.4%, France's CAC 40 slid 0.22% and Germany's DAX edged down 0.03%, while Switzerland's SMI ended 0.05% up.

Among other markets in Europe, Belgium, Denmark, Greece, Ireland, Netherlands, Russia and Spain closed higher, while Austria, Czech Republic, Finland, Iceland, Norway, Poland, Portugal, Sweden and Turkey ended weak.

In the U.K. market, Pearson, TUI, Centrica, Berkeley Group and Barratt Developments gained 4.5 to 6.5%. Persimmon, Next and Land Securities gained about 3%. Taylor Wimpey, Severn Trent, Diageo, Smurfit Kappa Group, Johnson Matthey, British American Tobacco, Informa and Associated British Foods also rose sharply.

On the other hand, Fresnillo, CRH, WPP and BHP Group declined sharply.

In the German market, Infineon Technologies declined more than 2%. Covestro, SAP, Deutsche Bank, HeidelbergCement and Daimler closed with moderate losses, while Lufthansa, Vonovia, RWE, Wirecard and Merck gained 1 to 1.5%.

In France, Safran gained nearly 4%, Carrfour surged up 3.8% and Airbus gained 3.1%. Engie and Peugeot moved up 2.7% and 2.4%, respectively. Capgemini, Veolia, Atos, Valeo and Unibail Rodamco also closed notably higher.

Among the losers, STMicroElectronics tumbled more than 5% and Hermes International slid 2.1%. Renault ended lower by about 1.75%.

In economic news, German manufacturers' export expectations strengthened in July, survey data from the ifo institute showed. The ifo export expectations index for manufacturing rose to plus 6.9 points in July from minus 2.2 points in June.

Cautious optimism is spreading among German exporters, Clemens Fuest, ifo President said. German exports are benefiting from the economic recovery in many countries. Expectations among car manufacturers showed strong improvement in July. Confidence also returned to the electronics and chemical industries.

Pessimism in the mechanical engineering sector decreased noticeably, but sales were not yet expected to rise in July. Nonetheless, the export market remained difficult for the clothing and leather goods industry, the survey showed.

According to the monthly Distributive Trades Survey data from the Confederation of British Industry, UK retail sales grew in July after three months of sharp declines due to the restrictions imposed to contain the spread of the coronavirus. The retail sales balance rose to +4% in July from -37% in June. Economists had forecast the balance to improve moderately to -25%.

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