MILAN: European shares edged up on Wednesday, supported by strength in mining stocks and some solid earnings updates, although a drop in Italian banks on fresh political worries weighed.
The pan-European STOXX 600 index rose 0.1 percent by 0855 GMT, hovering around its highest level since early February, while Italy's FTSE MIB fell 0.9 percent.
Italian banks, which are seen as a proxy for political risk in the country due to their government bond holdings, fell 1.5 percent as borrowing costs rose after a report that Italy's 5-Star and League plan to ask the ECB to forgive 250 billion euros of Italian debt.
Investors were sceptical the proposal by the two parties currently in talks to form a government could be feasible and even though the League later denied the plan, said relations with Brussels could deteriorate.
"Pretending the unilateral cancellation of 250 billion euros of debt bought by the ECB as part of the QE programme would be absurd," said Giuseppe Sersale, fund manger at Milan-based Anthilia Capital Partners.
"Even if unfeasible, the tone of the debate bolsters expectations there will be a stormy relationship with Europe and a further relaxation of financial discipline."
Among top gainers on the STOXX was Micro Focus, which rose 7.6 percent after Britain's leading software company said a new $40 million licensing deal would help bolster its first-half revenue.
French manufacturing group Alstom also rose sharply, up 5.3 percent following its update. The group, which is merging its rail operations with Germany's Siemens , reported higher annual sales and profits.
Saipem soared 8 percent to the top of the STOXX after it was upgraded by Bernstein to "outperform", reflecting growing optimism in the recovery of the embattled Italian oil services firm.
The recent surge in crude oil prices has helped the oil and gas sector rise 13 percent so far this year, leading sectoral gainers in Europe.
Paddy Power Betfair rose 6.3 percent after the bookmaker said it was in discussions regarding a potential combination of its US business and fantasy sports company Fanduel to target the prospective US sports betting market.
Elsewhere, Elior, however, fell 15 percent following a profit warning.
Comments
Comments are closed for this article.