European stocks ended sharply higher on Wednesday, after starting the session with significant losses, as investors digested Donald Trump's win in the U.S. presidential race.
The pan-European Stoxx 600 closed up 1.46 percent after rebounding from heavy losses at the open. The German DAX recovered to end 1.56 percent higher even after the index slid nearly 3 percent as the session began.
Donald Trump declared victory early Wednesday, saying Hillary Clinton had conceded the election and that it's time for the nation "to come together as one united people."
Health care in Europe closed up 4.6 percent with analysts stating that a Trump victory supports the pharmaceutical sector given that drug pricing reforms, proposed by Hillary Clinton, are unlikely to materialize. This helped the Swiss benchmark to rally with its heavy exposure to large pharma giants like Roche and Novartis. Basic resources and construction stocks were also seeing gains on strong economic data out overnight from China.
"We may have already seen the worst of the moves in the markets following Donald Trump's surprise victory in the presidential election this morning," Craig Erlam, a senior market analyst at Oanda, said in a research note.
In the U.S., stocks recovered from a choppy start with the Dow Jones industrial average 0.78 percent higher and the broader S&P 500 index 0.72 percent up.
Sainsbury's said Wednesday that it is concerned over rising inflation after reporting a pre-tax profit drop of almost 10 percent to £372 million ($461 million) in the first six months of 2016. Shares closed down more than 6.5 percent.
Burberry announced a 40 percent fall in profits in the first half of this year, reaching £72 million ($90 million) compared to £119.5 million a year ago. Shares ended down over 2 percent.
The European Commission released Wednesday its latest economic forecasts. The executive said growth in the euro area will slow down in 2017 to 1.5 percent, from 1.7 percent in 2016. The EU's gross domestic product rate is also seen dropping between this year and the next from 1.8 percent in 2016 to 1.6 percent in 2017.