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European Stocks Close Higher On Stimulus Hopes, Vaccine Updates

European markets closed higher on Thursday as investors looked ahead to an announcement from U.S. President-elect Joe Biden about additional fiscal stimulus, and reacted positively to encouraging updates on the coronavirus vaccine front.

According to reports Johnson & Johnson's one-shot Covid vaccine is safe and appears to generate an immune response in both young and elderly volunteers.

On the stimulus front, a report from CNN citing two people briefed on the deliberations said the price tag for the U.S. relief package is expected to be in the ballpark of $2 trillion.

The pan European Stoxx 600 climbed 0.72%. The U.K.'s FTSE 100 gained 0.84%, Germany's DAX gained 0.35% and France's CAC 40 ended 0.33% up, while Switzerland's SMI edged up marginally.

Among other markets in Europe, Austria, Belgium, Denmark, Iceland, Netherlands, Norway, Poland, Portugal, Russia and Sweden ended with solid gains. Ireland and Spain edged up marginally, while Czech Republic, Greece and Turkey closed weak.

In the UK market, IAG shares gained nearly 6.5%. Whitbread gained 4.3% after the company said its strong balance sheet provides the opportunity to take full advantage of the enhanced structural opportunities that are already visible in the market. The company reported a sharp fall in total sales for the third quarter of fiscal 2021.

Taylor Wimpey declined sharply after reporting a fall in sales in the second quarter of the year. BHP Group, Anglo American, Johnson Matthey, Barratt Developments, Glencore, Antofagasta, Rio Tinto, Persimmon, WPP and Imperial Brands gained 2 to 4%.

On the other hand, B&M lost 5.8%, Just Eat Takeaway ended lower by 4.6%, Pennon Group slid 2.8% and RightMove ended 2% down.

In France, Airbus Group gained more than 4.5%. Unibail Rodamco, Sodexo, Thales, Air France-KLM, Vinci, WorldLine, Sanofi, Peugeot, Safran and Accor gained 2 to 4%. Publicis Groupe, ArcelorMittal, Engie and Bouygues also moved up sharply.

Carrefour, which posted a hefty gain on Wednesday, slid 2.5% after the French government signaled initial opposition to Canadian convenience-store operator Alimentation Couche-Tard Inc. buying the company.

Orange, Credit Agricole and Essilor were among the other notable losers.

In the German market, Volkswagen, Deutsche Bank, Lufthansa, Deutsche Post, Thyssenkrupp and MTU Aero Engines gained 3 to 5%, while Infineon Technologies, SAP and Beiersdorf ended notably lower.

In economic news, UK housing market activity growth softened in December as the lockdown restrictions coupled with the ending of the Stamp Duty holiday weighed on the property market, data released by the Royal Institution of Chartered Surveyors, or RICS, showed.

According to a report from Destatis, the German economy suffered a deep recession, a situation similar to that of the 2008-2009 financial and economic crisis. Gross domestic product fell 5% in 2020, in contrast to the 0.6% rise seen in 2019. However, the economic downturn was less serious than in 2009, when GDP slid 5.7%, the report said.

The euro area house prices grew at a steady pace in the third quarter, data published by Eurostat showed on Thursday. House prices advanced 4.9% annually, the same rate of growth as posted in the second quarter. On a quarterly basis, growth in house prices slowed to 1.3% from 1.6% a quarter ago.

European Central Bank policymakers were concerned that the resurgence in the coronavirus pandemic that has led to restoration of lockdown in several countries could prolong the economic crisis, minutes of the latest policy session showed.

Policymakers pointed out that the expected shape of the recovery now looked very different from the V- and U-shapes expected earlier in the year.

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