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European stocks higher on global trade and political reprieve; Clydesdale Bank down 21%

European stocks traded higher, on Thursday morning, after confirmation of new US-China trade talks and political tensions in the UK and Hong Kong show signs of easing.

The pan-European Stoxx 600 rose 0.4% in early deals, autos jumping 1.4% to lead gains as most sectors and major bourses traded in positive territory.

China’s Ministry of Commerce said Thursday that US and Chinese trade negotiators held a phone call in the morning and agreed to meet in early October for another round of negotiations. In a statement to CNBC, a US Trade Representative spokesperson confirmed the phone call, but did not confirm the October meeting.

Chinese stocks jumped on Thursday afternoon with all mainland indexes gaining more than 1.5%, as investors also closely watched Hong Kong markets following the Hang Seng’s 4% surge, on Wednesday.

The rally came after Hong Kong Chief Executive, Carrie Lam, fully withdrew the controversial extradition bill which caused months of violent protests in the city.

British Prime Minister Boris Johnson on Wednesday night failed in his bid to call a snap general election for October 15.

A bill introduced by opposition parties to block Johnson from taking the UK out of the European Union without a deal on October 31 was also passed and will not ascend to the House of Lords, the upper chamber of parliament.

The bill is now expected to pass through the Lords and be presented for royal ascent, on Friday.

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Italy also saw an end to its recent political turbulence after Prime Minister Giuseppe Conte unveiled his new cabinet on Wednesday, uniting an unlikely coalition between the anti-establishment Five Star Movement (M5S) and the center-left Democratic Party (PD).

In corporate news, Britain’s Royal Bank of Scotland may have to part with a further £900 million ($1.1 billion) to settle a final compensation bill for mis-selling payment protection insurance, following a last minute surge in customer claims before a deadline set by the UK’s financial regulator.

Meanwhile, the Financial Times reported that UBS is planning a revamp of its investment bank amid falling profits over the last few quarters. The move comes as investment banks recorded their worst start to a year since 2006.

Stocks on the move

Shares of French engine maker Safran jumped 6.5% in early trade to top the Stoxx 600 after strong first-half results, closely followed by Equinor, which gained 6% after the announcement of an early start to its Johan Sverdrup oil field.

Clydesdale Bank stock tumbled 21.4% at market open after making a further provision of £300-£450 million in legacy costs to settle PPI claims.

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