European shares are in the green around midday Friday, as the political uncertainty in Italy appears to be coming to an end. Populist parties 5-Star and League revived their Government formation talks Thursday and have proposed a more palatable cabinet to lead their coalition.
Investor sentiment is also upbeat despite the vote of no confidence for Spanish PM Mariano Rajoy.
By 1235 BST, the EUROSTOXX 600 was 1.11% higher, while the EUROSTOXX 50 had gained 1.65%. The German DAX rose 1.07%, the French CAC was up 1.43%, the Spanish IBEX moved 2.20% into positive territory and the Italian MIB was 2.78% in the green.
Italian banks lead gains on improved political backdrop
After being the lead fallers for much of the week, Italian bank stocks made notable gains earlier Friday.
Investors regained confidence in the stocks as the prospect of a re-election in Italy fade as Prime Minister-designate Giuseppe Conte presented his new list of ministers to President Sergio Mattarella. The new Italian Government is expected to be sworn in later Friday.
Banco BPM shares were 9.62% higher at €2.43, Ubi Banca shares rose 7.71% to €3.48, UniCredit shares gained 6.06% to €14.99 and Intesa Sanpaolo shares were 5.73% up €2.66.
Other stock movers
Italian banks weren’t the only positive movers Friday.
Deutsche Bank shares regained some of the step losses made Thursday. Deutsche Bank shares rose 3.52% to €9.48 despite a downgrade by ratings agency S&P to BBB+ from A-.
Elior Group shares were another major gainer, rising 5.69% to €15.05 following a stock upgrade to ‘outperform’ from Credit Suisse.
There were also a couple of stock fallers.
Dialoug Semiconductor shares slumped 16.07% to €15.72 amid news Apple is set to source fewer chips from the tech business. And, Elekta shares slid 1.30% to €12.14 following a weaker-than-expected fourth quarter earnings report.