European shares steadied on Tuesday as trading in some markets resumed after the Christmas break, with Parmalat soaring after its French owner announced a buyout of the Italian dairy group. The pan-European STOXX 600 index was up 0.1 percent at its close but activity remained thin as many investors remained on holiday for the remaining few days of 2016.
While the UK market was closed for a public holiday, Germany's DAX rose 0.2 pct to touch a fresh year-high and France's CAC also gained 0.2 percent. "Markets are calm as thin holiday volumes are in play," said Ipek Ozkardeskaya, analyst at London Capital Group. Parmalat rose more than 10 percent, surging slightly above the 2.80 euros offer price lodged by France's Lactalis to buy up shares in the group that it does not already own.
A Milan-based trader said some investors may be hoping for a possible sweetener of the bid from the French group which took control of Parmalat in 2011. Most sectors traded in positive territory, with banks lagging after the European Central Bank (ECB) told Monte dei Paschi di Siena it needed to plug a capital shortfall of 8.8 billion euros, higher than a previous estimate of 5 billion euros.
Trading in Monte Paschi was suspended until the conditions of a state bailout of Italy's third largest lender become clear. Italy's bank index fell 0.5 percent, led lower by Banca Popolare Di Milano and Banco Popolare, which fell 4 percent and 3.7 percent respectively.
Deutsche Bank fell 1.5 percent. The stock shrugged off news that the ECB had lowered its minimum capital requirements, giving the lender more leeway to structure bonus payments and dividends. The top STOXX gainer was Denmark's SimCorp, which jumped more than 5 percent after signing a perpetual licence agreement with Generali. Mediaset climbed 2.8 percent with traders speculating what French media group Vivendi could do next after building up a stake of just below the 30 percent threshold that would trigger a take-over bid. Vivendi rose 0.7 percent.
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