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European Stocks Closed Lower On Growth Concerns

European stocks closed lower on Thursday amid worries about growth after the Bank of England held interest rates steady and forecast a slower post-pandemic economic rebound in the U.K.

The continued impasse over a new coronavirus relief package in the U.S. also weighed on sentiment, rendering the mood cautious.

The pan European Stoxx 600 declined 0.73%. The U.K.'s FTSE 100 slid 1.27%, France's CAC shed 0.98%, Germany's DAX lost 0.54% and Switzerland's SMI ended down 0.31%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Ireland, Netherlands, Poland, Portugal, Spain and Sweden ended with sharp to moderate losses. Turkey tumbled more than 5%.

Czech Republic, Norway and Russia ended flat, while Greece and Iceland closed higher.

In the U.K. market, Glencore plunged 7.4% after reporting a net loss of $2.6 billion for the first half of the year compared with a $226 million profit a year earlier.

Meggitt, Rio Tinto, Land Securities, IAG, Taylor Wimpey, BAE Systems, BP, Barratt Developments and Persimmon lost 3 to 4.7%.

TUI declined nearly 3%. Evraz, HSBC Holdings, Imperial Brands, Centrica, Diageo, Royal Dutch Shell, Uniliver and M&G ended lower by 1.7 to 2.7%.

Among the gainers, Aviva shares moved up more than 5.5% after the company said it would reduce its focus on Asia and Europe businesses following a 12% decline in operating profit in the first-half as it posted a 12% drop in H1 operating profit.

Pearson climbed more than 8%. Phoenix Group Holdings rose sharply after the company said the recent acquisition of ReAssure from SwissRe will substantially boost cash coming into the group.

ITV ended notably lower after reporting a 17% drop in revenue in the first half of 2020. Mondi, Carnival, Rightmove and Compass Group also closed notably higher.

In the German market, Beiersdorf slid more than 5%. Continental, Fresenius, Wirecard, Thyssenkrupp, Munich RE, Linde, BMW, Infineon Technologies and Allianz lost 1.5 to 2.7%.

Covestro gained more than 4% and Adidas ended nearly 2.5% up. Siemens rose sharply after posting an 8% jump in third-quarter profit. Merck also ended sharply higher.

In France, AXA eased by about 3.5% after the company said it booked a 1.5 billion-euro charge for claims related to Covid-19 in the first half and dropped its 2020 earnings target.

Unibail Rodamco ended 3.7% down. Orange, Accor, Peugeot, Renault, Kering, Michelin, Engie and Air Liquide lost 1.5 to 2.5%.

In economic news, The Bank of England policymakers left the interest rate at a record low of 0.1% as widely expected, and held the size of the asset purchase programme at GBP 745 billion.

In the accompanying Monetary Policy Report, the bank cautioned that unemployment will rise drastically and the economic and inflation outlook depends critically on the evolution of the pandemic.

All members of the Monetary Policy Committe (MPC) judged that the existing stance of monetary policy was appropriate. The MPC said it does not intend to tighten monetary policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.

The outlook remains unusually uncertain, the bank said. It will depend critically on the evolution of the pandemic, measures taken to protect public health, and how governments, households and businesses respond to these factors.

GDP is expected to have been over 20% lower in the second quarter of 2020 than in the fourth quarter of 2019. Economic output is not projected to exceed its level in the fourth quarter of 2019 until the end of 2021.

The UK construction sector expanded at the fastest pace since 2015 driven by house building in July, survey data from IHS Markit showed Thursday.

The IHS Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index rose more-than-expected to 58.1 in July from 55.3 in June. The reading was forecast to rise to 57.0.

Data from Destatis showed Germany's factory orders advanced 27.9% on a monthly basis, faster than the 10.4% increase seen in May. Economists had forecast a 10.1% rise for June.

The decline in Germany's construction sector eased in July driven by the upswing in residential activity, survey data published by IHS Markit showed. The construction Purchasing Managers' Index rose to 47.1 in July from 41.3 in June. A score below 50 indicates expansion in the sector.

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