Europe: Autos, banks fuel shares as Italy recovers

[LONDON] European shares touched their highest level since the start of February on Tuesday as autos and bank stocks climbed, and Italian shares recovered from Monday's dip on investors' worries over a new government's spending plans.

The pan-European STOXX 600 inched up 0.1 per cent, extending Monday's gains, with auto stocks and financials making gains while mining stocks fell.

Asian stocks had wilted overnight as surging oil prices reignited investors' fears of inflationary pressures.

Carmakers Volkswagen, BMW, Daimler were among the biggest boosts to the STOXX, up 1 to 1.6 per cent, after a Bloomberg report that China would cut import duty on cars to 15 per cent from 25 per cent.

Italy's Fiat Chrysler also rose 1.2 per cent, helping the Italian index gain 0.6 per cent. Investors were still awaiting the final details of 5Star and League's government after the anti-establishment parties proposed a political novice as prime minister.

Inmarsat shares sank 12.6 per cent to the bottom of the STOXX after the International Maritime Organisation authorised competitor Iridium to provide maritime safety systems, threatening Inmarsat's monopoly in maritime distress communications.

Fischer jumped 8.8 per cent after UBS raised the stock to a "buy".

Among smaller companies, bicycles to car parts retailer Halfords became the latest in a string of British consumer-facing companies to warn on profits. Its shares fell 13.7 per cent to the bottom of the FTSE 250 after warning profits would be flat.

REUTERS