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Europe markets close mixed; oil prices slip 3%; ECB, UK election in focus

European markets closed mixed on Wednesday, as oil prices dipped and investors remained cautious ahead of major political and economic events on Thursday.

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The pan-European Stoxx 600 pared all of its gains to close marginally lower on Wednesday with sectors mixed and major bourses in negative territory.

Oil prices slumped during afternoon deals with Brent trading at $48.41 a barrel shortly after the European close, down more than 3 percent after a surprise increase in stockpiles of crude oil in the United States.

European banking stocks led the gains on Wednesday after Santander agreed to buy Banco Popular for one euro. The Spanish lender announced plans to raise 7 billion euros ($7.9 billion) to prop up the troubled Banco Popular. While shares ended under pressure, Santander's chairman told a news conference the takeover would be "good for Spain and good for Europe."

Spain's economy minister, Luis de Guindos said in a statement, "It's a good outcome for the bank, given the situation it had arrived at in recent weeks, as it implies maximum protection for depositors and continuity of the bank's operations."

Chemical stocks were among the worst performing on Wednesday as shares of Covestro slipped over 4.6 percent after Bayer said it had made substantial progress in reducing its shareholding of the German plastic maker.

French multinational Vivendi signed an agreement to purchase its majority stake in the Havas Group on Wednesday. The stock jumped over 2 percent on the news.

Meanwhile, in the U.S., the Dow Jones industrial average and broader S&P 500 both continued little changed ahead of Britain's general election, the European Central Bank policy meeting and former FBI Director James Comey's testimony on Thursday.

Election, ECB in focus

In the U.K., opinion polls continued to indicate a victory for the Conservative party on Thursday but its lead over the Labour party was constantly changing. Investors will be watching closely to try and understand the strength of the new U.K. government ahead of upcoming Brexit talks. Sterling was marginally lower on Wednesday shortly after the European close, trading at $1.2906.

In France, the latest polls show that the party of President Emmanuel Macron is set to win the biggest parliamentary majority since 1968 later this month.

On investors' radar is also an ECB meeting, where policymakers are expected to take a less dovish tone. Meanwhile, they are carefully watching the political rift between Qatar and several other countries in the Middle East. According to Reuters, trade in commodities, such as oil and food, is already being hit after just one day of the diplomatic row.

Elsewhere, factory orders in Germany dropping more than expected in April. Month-on-month factory orders fell by 2.1 percent in April and appeared to fuel concerns over the stability of the German economy.

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