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Major European Markets Close Weak

European markets closed lower on Thursday as worries about growth amid rising coronavirus cases and prospects for tighter lockdown measures in several places outweighed optimism about additional stimulus from Joe Biden's administration in the U.S.

The European Central Bank's warning about the impact of the coronavirus pandemic on the economy, and some disappointing data too contributed to the weakness in European markets.

The pan European Stoxx 600 edged up 0.01%. The U.K.'s FTSE 100 ended lower by 0.37%, Germany's DAX declined 0.11% and France's CAC 40 slid 0.67%, while Switzerland's SMI ended 0.3% down.

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

In the UK market, Rolls-Royce Holdings, BP, IAG, Royal Dutch Shell, Smith & Nephew, British Land Company, Land Securities, BAE Systems, Pearson and Informa lost 2 to 4%.

On the other hand, Sage Group gained nearly 5% after the company said in its trading update for the three months ended 31 December 2020, that total Group revenue increased by 1.4% to 447 million pounds.

Just Eat Takeaway.Com, Ocado Group, Aveva Group, Auto Trader Group, Kingfisher, B&M, RightMove, ICP, M&G, Ferguson and Sainsbury gained 2 to 4.5%.

In France, Unibail Rodamco plunged more than 8%. Airbus Group, Air France-KLM, Safran, Veolia, Vinci, Thales, Bouygues, Credit Agricole, ArcelorMittal and Sodexo lost 1 to 3%.

Among the gainers, Accor rallied nearly 3%. Valeo, Schneider Electric, Renault, Dassault Systemes, Michelin, Carrefour and Teleperformance moved up 1 to 2%.

In the German market, MTU Aero Engines ended nearly 5% down. Lufthansa, Munich RE, Linde, Bayer, Fresenius, Deutsche Wohnen, Merck and Allianz lost 1 to 2%.

Volkswagen climbed nearly 3%. Daimler ended nearly 2% up. Infineon Technologies, Thyssenkrupp, Continental and Siemens gained 1 to 1.7%.

The European Central Bank today left its key interest rates and asset purchases unchanged, in line with expectations, and reaffirmed its willingness to adjust the policy tools when needed.

The Governing Council left the main refi rate unchanged at a record low 0% and the deposit rate was kept at -0.5%. The lending rate was held steady at 0.25%.

The Governing Council retained its forward guidance on interest rates, saying it expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2%. The bank retained the size of the pandemic emergency purchase programme (PEPP) at EUR 1,850 billion.

Risks surrounding the euro area growth outlook remain tilted to the downside, but are now less pronounced, the European Central Bank President Christine Lagarde said.

"The news about the prospects for the global economy, the agreement on future EU-UK relations and the start of vaccination campaigns is encouraging, but the ongoing pandemic and its implications for economic and financial conditions continue to be sources of downside risk," Lagarde said in the introductory statement to her post-decision press conference.

Eurozone consumer confidence deteriorated at a faster-than-expected pace at the start of the year, preliminary data from a European Commission survey showed. The flash consumer confidence index fell to -15.5 from -13.9 in December. Economists had forecast a score of -15.0.

The consumer confidence index for the EU dropped to -16.5 from -15.3 in December. Both readings are below their long-term averages of -11.0 and -10.6, respectively.

Data from Insee revealed French manufacturing sentiment improved in January. The manufacturing confidence index rose to 98 in January from 94 in December. This was the highest score since February 2020.

According to the Credit Conditions Survey from the Bank of England, British households' demand for secured lending for house purchases is set to fall in the first quarter.

The Industrial Trends Survey report released by the Confederation of British Industry said UK manufacturers expect production and new orders to decline in the coming three months.

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