Europe close: Italian shares jump on hopes for possible Draghi government
European shares were mostly higher for the third straight session with Italian shares leading the pack north after former European Central Bank chief, Mario Draghi, agreed to try and form a unity government.
However, Draghi also reserved the right to accept or not any mandate to become the next premier following talks with the country's political parties, ANSA reported.
The pan-European Stoxx 600 index was ahead 0.33% at 407.27, but Italy’s FTSE Mibtel outperformed with a 2.09% jump to 22,527.90, as investors were cheered by the prospect of the well-respected Draghi taking charge of the nation’s response to the Covid-19 pandemic.
“He’s a highly skilled operator, a consummate politician and we know he'll do 'whatever it takes' to steer Italy out of its worst economic and health crisis since the war,” said Markets.com analyst Neil Wilson.
"As far as technocrats go, you woBanco BPMn't find a better one. Italian banks like the idea of Draghi as PM – shares rose 6% in the major names. His expertise in this area is clearly a positive. Italian 10-year bond yields sank 7 basis points to 0.585. I think many of us who watched every ECB presser for the last decade will think Italy has secured a top operator."
Shares of Italian lenders Unicredit, Intesa Sanpaolo, Poste Italiane, and Atlantia were all higher.
Elsewhere, shares in German telecoms group Freenet soared after the company announced another €135m share buyback and special dividend payment.
Vodafone rallied as it said it was confident about the full-year outlook after its German business drove a return to organic growth in the third quarter.
Aviva advanced after an upgrade to 'overweight' at Morgan Stanley, while Upper Crust owner SSP was boosted by an upgrade to 'buy' at Berenberg.
On the downside, Unite Group fell after it announced a three-week extension to its 50% student discount and said the move would cost it £6m in lost revenue. It was also hit by a downgrade to ‘underweight’ at Barclays.