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European stocks close mostly lower as UK awaits new leader

European stocks closed mostly lower on Wednesday as equity markets struggled to hold gains, despite hopes of further monetary easing around the world.

The U.K.'s FTSE 100 closed roughly 0.2 percent lower and the German DAX closed provisionally 0.3 percent lower.

However, the French DAX ended unofficially 0.1 percent higher.

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FTSE
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IBEX 35
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Investors anticipate further economic policy easing around the world, including a possible interest rate cut from the Bank of England on Thursday, fiscal and monetary stimulus in Japan and a delayed rate hike from the U.S. Federal Reserve.

U.K. Home Secretary Theresa May is set to be installed as prime minister on Wednesday evening, replacing David Cameron who tendered his resignation after the Brexit vote last month. It remains unclear when May will trigger Article 50, which initiates the withdrawal process from the European Union; she has signaled it could be later this year or 2017.

U.S. stock indexes traded roughly flat on Wednesday. The Dow Jones industrial average and the S&P 500 hit all-time intraday highs once again, before paring gains.

Burberry warns on weak outlook

Luxury fashion brand Burberry reported retail revenues that were flat in the three months to June 30 and warned wholesale revenue would be weaker than previously expected. However, shares rallied to the top of the FTSE 100, closing up 6.3 percent.

In other U.K. business news, Steinhoff agreed a £597 million ($794 million) takeover of the U.K.'s Poundland. Shares of the budget retailer leaped to close up 12.6 percent.

Elsewhere, France's Airbus is slashing production of its A380 superjumbo, which has struggled to win new customers amid a lacklustre market for widebody aircraft. Shares fell on the news, before closing 1.7 percent higher.

Meanwhile, shares of Nokia rallied to close 4.8 percent up after it expanded its patent licensing deal with South Korea's Samsung.

Italian banks in focus

Italy's finance minister, Pier Carlo Padoan, said the Italian banking sector was "solid" and the need for recapitalization was overstated. Investors are concerned about the large number of bad loans held by Italian banks, which could pose a threat to the euro zone's other lenders.

Shares of Italy's Banca Monte dei Paschi di Siena (BMPS) closed 5.4 percent higher after reports that JP Morgan might be chosen to manage the sale of its roughly 10 billion euro ($11 billion) portfolio of non-performing loans.

Unicredit shares reversed gains to close 3.8 percent lower after it sold minority stakes in two of its units, raising 1 billion euros ($1.1 billion).

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