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European stocks close higher as banks surge; strong earnings; Banco Popular up 5.5%

European stocks closed higher on Wednesday as banking stocks snapped a six-day losing streak.

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The pan-European Stoxx 600 was 0.24 percent higher with most sectors trading in positive territory.

The FTSE 100 in London slipped 0.46 percent, the CAC 40 in Paris rose 0.27 percent and the DAX in Frankfurt gained 0.13 percent.

Banks stocks led the gains with Banco Popular climbing 5.5 percent. The Spanish bank Santander raised 750 million euros ($804 million) on Tuesday after selling perpetual bonds - a bond with no maturity date - according to Reuters. Its shares were 2.9 percent higher.

Basic resources stocks were also higher on earnings reports. Rio Tinto jumped 0.9 percent ahead of an earnings publication due out on Wednesday evening.

Looking at particular stocks, Vopak closed under pressure despite the Dutch firm reporting higher-than-expected revenues in the first quarter. AB Foods moved up by 1.2 percent, after reporting a 36 percent increase in profits in its first-half fiscal year. This was driven by a recovery in its sugar business and Primark's strong sales.

In contrast, Burberry slipped more than 7.9 percent after a slowdown in its fourth-quarter comparable sales growth rate. Zalando shares also dropped nearly 4.7 percent after the online retailer saw lower margins on the back of post-Christmas sales.

In the U.S., equities traded mixed on Wednesday, with IBM sending the Dow Jones industrial average lower and Morgan Stanley leading financials after posting quarterly results.

Sterling hits six month-high

Europe is set for another general election this year, after U.K. Prime Minister Theresa May called a snap vote for June 8. The Conservative leader aims to strengthen her parliamentary majority before reaching a Brexit deal with the European Union. Sterling surged to a more than six-month high following the news on expectations that the election could lead to a more market-friendly exit from the EU.

In the U.S., Morgan Stanley reported a 74 percent jump in quarterly profits on Wednesday, buoyed by recent interest rate hikes by the Federal Reserve. The report was in stark contrast to Goldman Sachs' surprise earnings miss in the previous sessions.

In terms of data, the euro zone core inflation was stronger-than-expected in March as the 19 countries sharing the single currency slowed down to 1.5 percent year-on-year. The European Union's statistics office said Wednesday the slight contraction was down from the four-year high of 2 percent in February.

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