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Europe ends higher as earnings, tech rally lifts stocks; miners fall

European equities posted strong gains by Wednesday's close, as a rally in technology stocks and a slew of positive earnings helped offset the declines seen by the miners.

The pan-European STOXX 600 closed up 1 percent, with most sectors finishing in positive territory.

In individual bourses, France's CAC and Germany's DAX soared 1.15 and 1.6 percent respectively by the close. Meanwhile, the U.K.'s FTSE 100 lagged behind, finishing up 0.5 percent.

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In the U.K., new figures showed that the country's unemployment rate edged lower in the three months to May, hitting its lowest level since 2005. The jobless rate fell to 4.9 percent, lower than the Reuters estimate. Sterling rose on the back of the news, trading up against the dollar, hovering at $1.3163 by Europe's close.

Elsewhere in the country, the new Prime Minister Theresa May took part in her her first Prime Minister's Questions on Wednesday. May discussed jobs, the country's economy and Brexit, and said the U.K. would be leaving the EU, but not Europe; and that the country was open for business.

In global markets, Asia closed mixed with a sharp decline in Nintendo shares weighing on sentiment; while U.S. stocks traded higher as Wall Street celebrated better-than-expected earnings. Investors worldwide will now be turning their attention to the European Central Bank, which is due to announce its latest rate decision on Thursday, less than a month after the U.K. decided to leave the EU.

Earnings: Electrolux falls while Ubisoft rallies

Earnings season is underway with a number of European corporates reporting. Home appliances maker Electrolux said operating income in the second quarter rose 70 percent year-on-year thanks to a strong performance in North America, however shares tumbled, ending 6 percent down.

Nordea reported a slight drop in operating profit in the second quarter which hit 1.22 billion euros ($1.34 billion), though this was above analyst expectations, sending shares to close up 3.5 percent.

Meanwhile Eurotunnel, the operator of the Anglo-French rail link, lowered its core profit outlook for 2016 and said it is difficult to predict the impact of Brexit. Still, revenues in the first-half of the year were up 2 percent year-on-year. Shares ended 1.5 percent down.

Ubisoft Entertainment was Europe's best performer, jumping 7.8 percent, after the video game developer's first-quarter sales beat forecasts and it confirmed its full-year guidance.

Volkswagen rallied 6 percent after it reported that its operating result before special items for the first six months is 7.5 billion euros, saying that it was "significantly higher than market expectations".

In other business news, shares of HSBC fluctuated during afternoon trade, closing up 1.65 percent. This comes after reports that two of its senior bankers had been arrested in connection with a case involving currency benchmark rigging. HSBC has declined to comment.

Tech sector outperforms, miners slip

The technology sector outperformed the broader market, closing up 3.2 percent, thanks to software giant SAP. Shares of the German firm rallied 5.7 percent, after it reported a 9 percent rise in operating profit in the second-quarter helped by its cloud business.

And shares of telecoms equipment maker Ericsson ended 3 percent up after a report in business newspaper Dagens Industri suggested that two of the Swedish firm's main owners have decided chief executive Hans Vestberg needs to step down.


Meanwhile, basic resources ended 1.2 percent down as a sector. BHP Billiton said it missed its iron ore guidance by 3 million tons due to the suspension of production at its half-owned Samarco mine in Brazil where a dam burst last November, killing 19 people and causing what Brazil said was its worst environmental disaster. Shares of the miner closed 2.3 percent down.

Elsewhere in the sector, Anglo American fell 4.8 percent, after it reported a mixed output for the second quarter amid continued restructuring efforts.

On the oil front, crude prices ticked higher after trading in the red. This comes after government data showed that U.S. commercial crude stockpiles had fallen by 2.3 million barrels to a total of 519.5 million barrels. Brent and U.S. crude extended gains at Europe's close, hovering at $47.14 and $44.91.

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