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 SXXP, +0.74% 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 CLQ7, +0.98% 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.
Italian bank rescue: The Italian government on Sunday reached a deal to close two struggling lenders — 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).
The “good” assets of the banks will be transferred to Intesa Sanpaolo SA ISP, +3.82% for the token price of €1 . Shares of Intesa rose 3.1% on Monday after the news. Among other Italian banks, shares of Unione di Banche Italiane SpA UBI, +3.74% added 3.5% and UniCredit SpA UCG, +3.17% picked up 2.7%.
Italy’s FTSE MIB index I945, +1.42% rallied 1.1% to 21,062.29.
Other movers: Shares of Nestlé SA NESN, +4.45% 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 in the Swiss consumer-products stalwart.
The euro EURUSD, -0.0625% was down at $1.1188, compared with $1.1193 late Friday in New York.