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CAC 40 Rebounds Led By Automakers

French stocks were sharply higher on Wednesday after Federal Reserve Chairman Jerome Powell pledged continued support for the U.S. economy and urged lawmakers for more fiscal stimulus.

The benchmark CAC 40 index was up 94 points, or 2 percent, at 4,867 after declining 0.4 percent on Tuesday.

Peugeot shares jumped 4.5 percent after the automaker said it would buy back 10 million of its own shares from Dongfeng Motors. Renault surged 4 percent.

Investors shrugged off survey results from IHS Markit showing that the French private sector contracted in September due to the renewed disruption related to the coronavirus disease 2019 pandemic.

The flash composite output index declined unexpectedly to 48.5 from 51.6 in August. The score was expected to rise to 51.9.

The fresh downturn was driven by a solid reduction in activity at services firms, while manufacturers reported an expansion in the sector.

The flash services Purchasing Managers' Index came in at 47.5, while it was expected to remain unchanged at 51.5.

The factory PMI rose to 50.9 from 49.8 a month ago. This was above the consensus of 50.5.

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