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European markets close higher; banks hit 18-month highs; Anglo American up 8.6%

European markets closed higher on Thursday after the defeat of the populist anti-European Union candidate Geert Wilders in the Dutch election.

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The pan-European Stoxx 600 closed 0.7 percent higher with most sectors and major bourses ending Thursday's session in positive territory with the FTSE 100 hitting a record high of 7,418.

Basic resources led the gains up by over 3.3 percent after news that Indian tycoon Anil Agarwal is making a personal bet on Anglo American worth up to 2 billion pounds ($2.4 billion). Most of the best-performing stocks on Thursday belonged to the sector with Anglo American up by 8.6 percent, Fresnillo higher by 3.9 percent and Antofagasta up by 4.6 percent.

Banking stocks also saw strong gains during Thursday's session. In particular, the Euro Stoxx Banks Index jumped 0.9 percent, which meant that euro area banks have managed to recover the losses suffered in the global sell-off seen at end of 2015. The sector is benefiting from a pickup in interest rates, positive economic data and a relaxation of populist fears.

Meanwhile, in the U.S., the Dow Jones industrial average and the broader S&P 500 continued under pressure after the Federal Reserve had expectedly raised rates on Wednesday.

Central Banks

The Bank of England kept rates unchanged on Thursday but one of the nine members voted in favour of hiking rates. The pound moved higher against the dollar following the news and was trading at $1.2365 shortly after Thursday's close.

Norway's central bank also decided to keep rates unchanged.

In Japan, the Central Bank said Thursday morning it was keeping its rates unchanged and the People's Bank of China raised its short-term interest rate by 10 basis points on both medium-term lending facility loans and its open market operation reverse repurchase agreements.

And in the U.S., Fed chair Janet Yellen hiked rates by 25 points on Wednesday evening but signaled no pick-up in the pace of normalization of rates.

Turning to politics, voters in the Netherlands looked set to reject the anti-Islam and anti-EU Geert Wilders' Freedom Party. According to exit polls, the center-right Prime Minister Mark Rutte is on course for a clear victory. However, analysts warned it could take months before Rutte managed to form a new coalition government.


Other moving stocks

The German airline Lufthansa moved up by 5.2 percent after reporting earnings of 1.75 billion euros last year, in line with forecasts. However, it added that it expects profits to fall slightly in 2017.

By contrast, the French Renault ended down by nearly 3.5 percent after regulators said that Carlos Ghosn, the head of the firm, should be held responsible for diesel emission cheating investigations.

Shares of the Swedish software company Hexagon dropped 2.4 percent on the news that its chief executive officer was charged with insider trading, Reuters reported.

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