Europe midday: Italian shares jump as economy minister pledges budget orthodoxy

Stocks have started the morning higher, with investors heartened by the absence of any headlines regarding fresh US sanctions on Chinese-made goods.

Italian issues were doing especially well, with the shares in the country's lenders bolting out of the gate after the country's economy minister made further conciliatory noises at the weekend.

In an interview with Il Sole 24 Ore, Giovanni Tria said proposals for a flat income tax, a citizen's income and reversing the previous government's increase in the retirement age would be "compatible with the European Union's limits on public finances."

As of 1208 BST, the benchmark Stoxx 600 was trading higher by 0.55% or 2.05 points to 375.87, alongside a very sharp 2.22% or 453.24 point jump on Milan's FTSE Mibtel to 20,902.36.

At the top of the leaderboard in Milan were shares of lenders, UniCredit (4.82%), Intesa Sanpaolo (4.95%), Banco Bpm (5.04%) and aerospace engineer Leonardo (5.83%).

Spain's Ibex 35 joined in the FTSE Mibtel's bounce, rising 1.26% to 9,286.90, as Mediaset's Madrid-listed stock rocketed 14.73%.

The Dax-30 and Cac-40 on the other hand were enjoying smaller gains of roughly half a percentage point each.

Pacing gains in Europe was Telecommunications, with the corresponding sector gauge up by 1.28% to 241.22, alongside a 1.23% rise 155.49 for the Stoxx 600 sector index for banks as the yield on the benchmark 10-year Italian government note fell back by nine basis points to 2.94%.

Giving Telecommunications a lift was the decision by strategists at Deutsche Bank to revise their recommendation on the space from 'underweight' to 'overweight'.

Commenting on the situation in markets at the start of the week, Mike van Dulken at Accendo Markets said: "Calls for a positive open come after a mixed start to the trading week in Asia, where Chinese bourses were down following a weekend of worry over all-but-guaranteed US trade tariffs on an additional $200bn of Chinese imports.

"Japan is the only green spot thanks to better than expected overnight economic growth figures."

Data released overnight showed China's trade surplus with the US hit a record $31.05bn in August, which was up from $28.09bn for July.

That was even as the country's overall pace of export growth slowed in US dollar terms.

"Shipments to the US accelerated, suggesting that any tariff impact was offset by robust demand from US consumers," said analysts at Capital Economics.

In other economic data, the Sentix institute's investor confidence index slipped from a reading of 14.7 for August to 12.0 in September (consensus: 14.3).

Meanwhile, the French central bank's industrial confidence index for August rose to a reading of 103.0, after a print of 101.0 in July.