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European stocks shot higher on Wednesday, after a report that the U.S. and China are moving closer on an agreement for a phase one trade deal, even after President Donald Trump cast doubt on its progress a day earlier.
The Stoxx Europe 600 SXXP, +0.88% rose 1.1% to 402.33 after ending Tuesday’s session down 0.6%, the fourth-straight losing session. For the week so far, the index has lost 1.3%.
The German DAX DAX, +0.96% rose 1.1% to 13133.62, while the French CAC 40 PX1, +1.12% rose 1.2% to 5793.61.
The FTSE 100 UKX, +0.14% rose 0.2% to 7177.82, with gains tempered as a rise in the pound GBPUSD, +0.4309% weighed on U.K.-based multinationals who earn the bulk of their profits outside the country.
U.S. stock futures climbed on Wednesday after Bloomberg reported, citing sources, that despite signs of fresh tensions, Beijing and Washington were making progress toward a phase one trade deal.
Wall Street equities suffered a third straight day of declines on Tuesday, after President Donald Trump said a deal with China may not come until after the U.S. elections next year.
Read: What a ‘no-deal’ U.S.-China trade scenario would mean for stocks and bonds
Trade issues have ramped up this week, as the U.S. reintroduced tariffs on Brazil and Argentina, and threatened tariffs on cheese, champagne and handbags from France, which vowed retaliatory action. French Finance Minister Bruno Le Maire said on Tuesday that the tariff threat was unacceptable.
On the data front, European stocks saw some support after the Markit eurozone November services purchasing managers index came in at 51.9, versus forecasts of 51.5. But it was down from 52.2 in October. The final eurozone composite output index was 50.6, from an initial 50.3.
Among stocks on the move, shares of Orange ORA, -4.42% fell nearly 5% after the telecommunications provider updated on short and medium-term targets.
Shares of Cineworld Group CINE, +5.38% jumped nearly 7%, after Jefferies analysts reiterated a buy recommendation on the movie theater operator, saying the recent share price decline is unwarranted. Shares slid nearly 4% on Tuesday, after the company said the integration benefits from its purchase of Regal Entertainment will be more than anticipated.
