Euro bourses follow Asia upwards, helped by talk of Italian bank rescue
London — European shares followed Asian stocks higher on Wednesday on reports of a government rescue for troubled Italian bank Monte dei Paschi and expectations of the European Central Bank extending its bond-buying stimulus scheme this week. Italian government bond yields fell, narrowing the premium investors demand to hold them rather than benchmark German debt, to its tightest for about a month. The pan-European STOXX 600 index rose 0.8%, led by banks, and Italy’s FTSE MIB share index gained 1.2%, hitting its highest for six months. Shares in Monte dei Paschi, Italy’s oldest bank and epicentre of its banking worries, rose 9%. Reuters reported exclusively on Tuesday that the government was set to take a ¤2bn controlling stake in the bank as prospects of a private funding rescue faded with Matteo Renzi’s decision to resign as prime minister. Investors fear that Renzi’s defeat in the referendum on constitutional reforms could further undermine faith in the EU and confidence in the e...
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