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Media stocks drag European markets to close lower; WPP tumbles 11% after outlook cut

  • The pan-European Stoxx 600 closed down 0.5 percent Wednesday with most sectors in negative territory.
  • WPP, the world's largest advertising group, cut its full-year net sales outlook after a drop in demand from consumer goods clients and weak trading in the U.S. caused it to miss first-half targets. The firm was on course for its worst trading day in 19 years on Wednesday as its shares tumbled 11 percent lower.
  • Fiat Chrysler Automobiles was trading slightly higher on Wednesday after Morgan Stanley and Jefferies raised their target price for the stock.

European markets closed lower Wednesday as sentiment turned negative and media stocks lagged.

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The pan-European Stoxx 600 ended the day down 0.5 percent with the majority of sectors in negative territory. Meanwhile in the U.S. stocks traded lower amid continued political upheaval.

In Europe, Media stocks were the worst performing on Wednesday, down more than 2.7 percent on earnings news. WPP, the world's largest advertising group, cut its full-year net sales outlook after a drop in demand from consumer goods clients and weak trading in the U.S. caused it to miss first-half targets. The firm was on course for its worst trading day in 19 years on Wednesday as its shares tumbled 11 percent lower.

The travel and leisure sector also sunk lower, closing the day down almost 1.5 percent as it struggled to recover from losses seen following a terror attack in Barcelona last week. Among the poorest performing stocks were airlines Ryanair and Easyjet, which were down 2.2 percent and 1.7 percent, respectively.

Provident Financial shares were trading higher on Wednesday after closing off by more than 66 percent in the previous session. The British subprime lender pared all of its losses from morning deals to hit the top of the European benchmark by close of play. Its shares were up 12 percent.

Fiat Chrysler Automobiles shares were also trading slightly higher on Wednesday after Morgan Stanley and Jefferies raised their target price for the stock. On Tuesday, the firm issued a statement denying it had been approached by China's Great Wall Motor regarding its Jeep sport utility business. It closed the day up almost 6 percent.

Euro edges higher

On the data front, forecast beating surveys in the euro zone's two biggest economies supported the euro against the dollar. The U.S. currency had wobbled overnight after President Donald Trump suggested he could force a government shut down over funding for a border wall with Mexico.

European Central Bank President Mario Draghi gave little indication about the next steps for monetary policy in the euro zone during a speech on Wednesday ahead of a key meeting between central bankers.

The euro edged up about 0.14 percent at $1.1778 following Draghi's speech and after the data showing better-than-expected PMIs (purchasing managers' index) for the bloc. It held steady in afternoon deals, closing the day at $1.1802. Sterling meanwhile fell to eight-year-lows against the single currency.

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Later this week, Federal Reserve Chair Janet Yellen is poised to speak at Jackson Hole's annual central banking conference, though further clues regarding the U.S. central bank's monetary policy is viewed as unlikely. Meanwhile, analysts predicted Draghi would refrain from using language that could potentially excite markets in his speech in Wyoming, having been scarred by recent experience at another banking conference in Portugal.

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