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Europe: Equities rise as oil stocks, Italian banks advance

Saturday, April 9, 2016 - 10:44

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[LONDON] European equities rebounded on Friday as Italian banks rallied and energy stocks advanced, although a pan-European index was headed for its fourth straight week of losses.

The STOXX Oil and Gas sub-index rose 3.5 per cent to lead gains among sectors, as encouraging economic data from the United States and Germany helped oil prices to rally. Hopes that global oversupply could be ending helped as well.

Shares in BP, Total and Eni rose 3.3 to 4.3 per cent.

Italian banks surged, with UniCredit gaining 9.7 per cent, the biggest advance in the FTSEurofirst 300 index on hopes that the government will soon offer a plan to set up a fund to buy bad loans and plug capital shortfalls at banks.

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Shares in UniCredit, Italy's biggest bank by assets, also got some support from optimism over a cash call at smaller rival Popolare Vicenza, which UniCredit is guaranteeing Italian shares outperformed the broader market, with the benchmark FTSE MIB index rising 4.1 per cent.

Shares in the banks BMPS, Banco Popolare and UBI Banca jumped 7.9 to 10.9 per cent.

The Italian government is keen to end concern about the health of the banking system, which is burdened by 360 billion euros (S$553.56 billion) of bad loans.

The FTSEurofirst 300 index ended 1.2 per cent higher after falling 0.8 per cent lower on Thursday, when the index slipped to a one-month low. It is still down nearly 10 per cent this year and set for another weekly loss.

German shares, up 1 per cent, were underpinned by a survey showing the country's exports rose more than expected in February, a sign that foreign demand was picking up again.

German publisher Axel Springer rose 8 per cent to a three-month high after JP Morgan upgraded the stock to"overweight" from "neutral".

However, Gjensidige, UPM-Kymmene and Swisscom fell 3.3 to 5.5 per cent, the worst three performers in the FTSEurofirst 300 index. The shares were trading ex-dividend: buyers would not get the latest dividend payout.

REUTERS

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