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Oct 20, 2016

European Markets Closing Report on October 20, 2016: European Recover From Session Lows to Eke Out Gains
Arjun Kharpal, Sam Meredith
European markets recovered from session lows to edge into the green at the close on Thursday as the European Central Bank (ECB) opted to keep interest rates unchanged.

ECB holds rates


FTSE FTSE 7020.81
-1.11 -0.02% 630107648
DAX DAX 10703.96
58.28 0.55% 88977073
CAC CAC 4538.60
18.30 0.40% 79043999
IBEX 35 IBEX 35 Idx 9057.80
107.70 1.20% 223400049

The pan-European STOXX 600 provisionally closed 0.13 percent higher with sectors mixed, though the banking sector led the charge with a rise of 1.16 percent.

The FTSE 100 closed under pressure while both the French CAC and Germany's DAX ended 0.38 and 0.49 percent higher respectively.
The ECB held rates, as widely expected, but President Mario Draghi sent stocks and the euro on a wild ride with his comments on future policy. Despite question after question from reporters in a Q&A session following the announcement Draghi continued to affirm there had been "no discussion" regarding the question of when the bank's bond-buying program would be extended or even wound down.
Kallum Pickering, senior UK economist with Berenberg bank, suggested that most investors will be eagerly awaiting the December meeting which could prove to be much more volatile. He said in a note, "The potential for market dislocations and volatility if the ECB didn't meet market expectations come December would be high. That the ECB didn't look to alter market expectations is significant - an extension of QE beyond March 2017 therefore is very likely."
The euro rallied hard before trimming gains whilst stocks were sent in the opposite direction.

Lufthansa shares soar

On the earnings front, Publicis reported sales in the three months to September 30 fell 0.4 percent due to lost client accounts. But the company confirmed its full-year guidance for 2016. Shares in the firm fell 5 percent however.
Meanwhile, Nestle shares were in negative territory after it reported sales for the first nine months of the year that missed expectations and the Swiss food firm lowered its full-year guidance.

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Deutsche Bank shares rallied up 4 percent on the back of a German magazine report suggesting the Qatari royal family would be ready to take part in a capital increase of Germany's biggest lender. Elsewhere, Barclays and Bank of Ireland posted gains of 3.2 percent and 7.3 per cent respectively.
Pharma giant Roche confirmed its outlook for 2016 and said third quarter group sales rose 3 percent, but shares were trading under pressure.
Lufthansa outperformed the broader market with shares jumping over 10 percent in morning trade as the German airline raised its profit target for the year on Wednesday. However, in afternoon trade Lufthansa retreated to trade at 7 percent.
And Swedish Telecom operator Tele2 B shares rallied 4 percent after reporting third-quarter core profit that beat market expectations.
Elsewhere, oil prices pulled back in the European trading session as investors appeared to take profits following a strong rally on Wednesday. Brent traded down 2 percent while U.S. WTI fell 1.92 percent.

—CNBC's Gemma Acton contributed to this article.