Oil stocks, Italian banks boost European equities

LONDON: European equities bounced back on Friday as Italian banks rallied and firmer oil prices boosted energy stocks, although a pan-European index was on track for its fourth straight week of losses.

The STOXX Oil and Gas indexes rose 1.7 percent, the top sectoral gainers, after oil advanced on expectations of increased fuel demand following firm economic indicators from the United States and Germany. Shares in BP, Total and Eni were all up by more than 2 percent.

Italian banks surged, with UniCredit gaining 7.6 percent, the top gainer in the FTSEurofirst 300 index. Traders linked the spike to news reports that an Italian plan to set up a state-backed fund that would help troubled lenders by buying up bad loans and plug capital shortfalls should be ready by Monday.

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 more than 3 percent. Shares in Italian banks BMPS, Banco Popolare and UBI Banca jumped 7-10 percent.

The FTSEurofirst 300 index was 0.8 percent higher by 1058 GMT after closing 0.8 percent lower in the previous session, when the index slipped to a one-month low.

It is still down nearly 10 percent this year and remained set for another weekly decline.

German shares, up 0.9 percent, were also underpinned by a survey showing the country's exports bounced back and rose more than expected in February, in a sign that foreign demand for goods from Europe's biggest economy was picking up again.

German publisher Axel Springer rose 5.4 percent to a three-month higher after JP Morgan upgraded the stock to "overweight" from "neutral" and said the company had reached a tipping point, thanks to the transition from print to online.

However, Gjensidige, UPM-Kymmene and Swisscom fell 4.7 to 5.7 percent, the worst performers in the FTSEurofirst 300 index, after their shares traded without the entitlement of their latest dividend payouts.