Europe: Share inch upwards at open

[MILAN] European shares inched up on Monday, held back by heavy losses among Italian stocks after a bigger than expected surge in support for anti-establishment parties in Sunday's election.

After hitting a 6-month low at the open, the pan-European STOXX 600 index was up 0.3 per cent by 0825 GMT. Italy's FTSE MIB blue-chip index was down 1 per cent, also a six-month low.

Gains in energy and materials stocks however supported the broader marker. They were helped by a rise in crude oil prices ahead of a meeting between Opec and US shale firms that raised expectations that producers would discuss further how to clear a global oil glut.

Italy faces a prolonged period of political instability after voters delivered a hung parliament in Sunday's election, spurning traditional parties and flocking to anti-establishment and far-right groups in record numbers.

"We expect lengthy negotiations after these elections, which may lead to increased volatility of Italian assets," said Matteo Ramenghi, CIO at UBS WM Italy.

Italian banks, which are seen as a proxy for political risk given their large government bond holdings, hit their lowest in nearly two months, falling 1.4 per cent.

US President Donald Trump on Saturday threatened European automakers with a tax on imports if the European Union retaliates against his plan to slap tariffs on aluminium and steel. In the auto sector, the top fallers were BM

W and Daimler, down 1.8 and 1.1 percent respectively.

AXA fell 5.1 per cent, leading losers among euro zone blue chips, after Europe's second-biggest insurer agreed to buy property and casualty insurance company XL Group for around US$15 billion.

Irish stocks fell after weak business and consumer sentiment data. The benchmark Dublin index dropped 2.2 per cent, bringing its decline so far this year to 7.4 per cent.

REUTERS