European stocks rise as fiscal worries weigh on Italy stocks

Published: June 06, 2018 15:50:09 | Updated: June 08, 2018 10:45:17

European shares edged higher on Wednesday, underpinned by gains in tech and commodity-related stocks, although trading was cautious amid worries over Italian spending plans and global trade.

The pan-European STOXX 600 index was up 0.1 per cent by 0911 GMT, while Germany's DAX .GDAXI advanced 0.4 per cent, reports Reuters.

Trading was choppy, with European stocks dipping briefly into negative territory, as investors mulled the implications of the new Italian coalition government’s big spending plans following Tuesday’s comments from the new Prime Minister Giuseppe Conte promising radical change.

Italian stocks FTMIB were notable underperformers on the day, down 0.8 per cent and extending their slide from the previous session.

Italian banks were among the biggest STOXX fallers, with shares in Intesa Sanpaolo, UniCredit and UBI Banca down 2.6 to 3.1 per cent.

Banking stocks were also lower, last down 0.4 per cent. The sector came under pressure last week as Italy struggled to form a government.

Analysts at Credit Suisse Wealth Management said that they preferred US financial stocks over those in the European Union.

Tech stocks reached another 17-year high, up 0.7 per cent, joining in a global rally which saw the US Nasdaq index end at a record close.

Among individual stocks, RPC was the biggest faller, tumbling more than 15 per cent after the plastic packaging leader said it was looking to sell assets.

Also in the packaging sector, shares in Smurfit Kappa (SKG.I) recovered some of yesterday’s losses, up 3.2 per cent, after International Paper (IP.N) confirmed that it will not make a bid for the Irish company.

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