European Markets Close Higher On Stimulus Hopes

European markets closed higher on Wednesday amid hopes the Joe Biden-led administration will announce additional stimulus to spur growth in the world's largest economy.

Already, new U.S. Treasury Secretary Janet Yellen has pledged to "act big" on stimulus to reinvigorate the economy hit by the coronavirus pandemic.

The rollout of coronavirus vaccines in several parts across the continent, and expectations of fairly good earnings results from top companies also contributed to the positive trend in European markets.

Rising coronavirus cases and reports saying authorities in several countries are looking to extend lockdown measures in many areas limited markets' gains.

The pan European Stoxx 600 climbed 0.72%. The U.K.'s FTSE 100 gained 0.41%, Germany's DAX moved up 0.77% and France's CAC 40 ended stronger by 0.53%, while Switzerland's SMI gained 0.63%.

Among other markets in Europe, Austria, Belgium, Finland, Iceland, Netherlands, Poland, Russia, Sweden and Turkey ended with sharp to moderate gains.

Czech Republic, Greece, Ireland and Spain edged up marginally. Denmark closed flat, while Norway and Portugal ended slightly weak.

In the UK market, Pearson shares surged up 8.6% on positive business update from the company. Johnson Matthey gained about 6.5%, and Burberry Group, Informa, Standard Life, Polymetal International and Evraz gained 3 to 4%.

BHP Group, Smith & Nephew, WPP, Rolls-Royce Holdings, Glencore, Sage Group, Scottish Mortgage, Entain, Hargreaves Lansdown, Rio Tinto, Just Eat Takeaway and Anglo American also rose sharply.

GlaxoSmithKline, Avast, Standard Chartered and Experian ended notably lower.

In the German market, auto stocks Daimler, BMW and Volkswagen gained 3 to 4.2%. Covestro, Infineon Technologies, MTU Aero Engines, Continental, HeidelbergCement and Bayer ended 1 to 3.4%

BASF shares climbed by about 1.2% after the company reported that its preliminary sales for the fourth quarter of 2020 increased 8 percent to 15.91 billion euros from last year's 14.69 billion euros, driven by higher volumes and prices.

Merck declined more than 4%. Deutsche Bank shed about 1.1%.

In France, Thales, LVMH, Michelin and Valeo gained 3 to 4%. STMicroElectronics, Renault, Kering, Credit Agricole, Safran, Saint Gobain, Airbus Group and Publicis Groupe also ended with strong gains.

On the other hand, Technip, Danone, Vinci, Pernod Ricard, LOreal and Air Liquide ended notably lower.

Dutch semiconductor equipment maker ASML Holding shares rose sharply after the company reported that its fourth-quarter net income rose to 1.35 billion euros from 1.13 billion euros in the same quarter last year.

In economic releases, U.K. consumer price inflation doubled in December on higher transport and recreation costs, data released by the Office for National Statistics showed.

Inflation accelerated to 0.6% from 0.3% in November. The rate was above economists' forecast of 0.5%. Month-on-month, consumer prices advanced 0.3%, reversing a 0.1% drop in November and faster than the expected rate of 0.2%.

UK house prices grew at the fastest pace in more than four years in November as homebuyers reassessed their housing preference amid the coronavirus pandemic, according to a report from the Office for National Statistics. House prices increased 7.6% year-on-year in November, faster than the 5.9% rise in October, the report said.

On a seasonally adjusted basis, average house prices gained 1.4% month-on-month, following an increase of 1.5% in October, data showed.

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