Oil rally boosts sentiment too
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European stocks logged broad gains on Monday, lifted by Italian banks after Rome stepped in to shut down two failed lenders, and as Nestlé SA rallied after a hedge fund snapped up a major stake in the consumer-products giant.
The Stoxx Europe 600 index climbed 0.6% to 389.87, setting it on track for its highest close in a week.
Stocks across Europe were last week pressured by a renewed selloff in oil prices, with crude slumping to a 10-month low on Wednesday. However, oil prices jumped more than 1% on Monday, helping lift energy giants on the European markets.
Shares of Total SA (TOT)(TOT) added 0.6%, Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) rose 0.9%, and Repsol SA (REPYY) put on 0.6%.
Italian bank rescue: The Italian government on Sunday reached a deal to close two struggling lenders (http://www.marketwatch.com/story/italy-may-spend-billions-to-shut-two-failing-banks-2017-06-25) — Veneto Banca and Banca Popolare di Vicenza — after the European Central Bank on Friday evening declared that the pair was set to fail. The bill to assume responsibility for liquidating the banks’ bad loans and other items could cost the government as much as 17 billion euros ($19 billion).
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The “good” assets of the banks will be transferred to Intesa Sanpaolo SA (ISP.MI) for the token price of EUR1 . Shares of Intesa rose 3.1% on Monday after the news. Among other Italian banks, shares of Unione di Banche Italiane SpA (UBI.MI) added 3.5% and UniCredit SpA (UCG.MI) picked up 2.7%.
Italy’s FTSE MIB index rallied 1.1% to 21,062.29.
Other movers: Shares of Nestlé SA (NESN.EB) jumped 4.3%, on track for an all-time closing high. The rally came after news that billionaire activist investor Daniel Loeb’s Third Point LLC hedge fund has taken a $3.5 billion stake (http://www.marketwatch.com/story/daniel-loebs-hedge-fund-takes-35b-nestle-stake-2017-06-25) in the Swiss consumer-products stalwart.
Individual indexes: Germany’s DAX 30 index climbed 0.6% to 12,806.14, while France’s CAC 40 index gained 0.8% to 5,309.48.
The U.K.’s FTSE 100 index traded 0.6% higher (http://www.marketwatch.com/story/ftse-100-breaks-4-day-losing-streak-as-oil-rallies-2017-06-26) at 7,467.28, boosted by the benchmark’s oil companies.
The euro was down at $1.1188, compared with $1.1193 late Friday in New York.
(END) Dow Jones Newswires
June 26, 2017 04:56 ET (08:56 GMT)