European shares hit three-week high on trade hopes, Italy bank gains

Published: January 08, 2019 15:52:31 | Updated: January 26, 2019 15:05:47

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, January 3, 2019. Reuters

European shares hit a three-week high on Tuesday as hopes of a possible trade deal between China and the US offset worries over global growth and Italian banks rose after Rome moved in support of troubled lender Carige.

The pan-European STOXX 600 benchmark rose 0.6 per cent by 0832 GMT, while euro zone stocks .STOXXE and UK's top share index FTSE .FTSE both rose 0.5 per cent.

Italian banks .FTIT8300 rose 0.9 per cent, also hitting a three-week high and outperforming gains in their European peers. The Italian government approved late on Monday a decree aimed at shoring up the bank, offering it access to a series of state-support options including recapitalisation.

Shares in Carige (CRGI.MI) were not trading, having been suspended last week by market regulator Consob, while shares in the country’s top lenders Intesa Sanpaolo (ISP.MI) and UniCredit (CRDI.MI) were up around 1 per cent.

Strength among retailers also propped up the market.

Their sectoral index .SXRP rose 1.4 per cent, as gains in France’s Carrefour (CARR.PA), up more than 3 per cent following a Bank of America Merrill Lynch upgrade to buy, helped more than offset a disappointing update from UK’s Morrison (MRW.L).

Shares in Britain’s fourth-largest supermarket group fell 2.6 per cent after it missed Christmas sales forecasts as weak consumer demand hit its retail and wholesale businesses.

Elsewhere, Signify (LIGHT.AS) fell 6.8 per cent to the bottom of the STOXX 600 after a downgrade to neutral from Bank of America Merrill Lynch, while Rotork was the top gainer on the index, up 6.1 per cent after it was upgraded by the same broker.

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