European shares rallied extending last week's rebound as investors anticipate positive developments over the debt situation in Europe ahead of the EU summit on December 9th. New rules draft for EFSF circulated in the financial press noting that the enhanced package would offer partial protection of as much as 30% to investors. Banking stocks benefitted from the news. Italian banks also soared after speculation that IMF was in talks with Italy for a financing package of €600B with a rate in the range of 4-5% which would give the country breathing room as it implements its austerity measures. Although the reports were denied by the IMF and other official sources, the article from La Stampa continued to sustain European markets, in the hope that maybe where there's smoke, there's fire. On the other hand, a worrying report from Moody's warned that the probability of multiple defaults by the euro zone countries is no longer negligible.
Corporate news was sparse during the session given that Q3 earnings season is over. Among notable movers, BNP Paribas [BNP.FR] rose over 3% following a financial report in which it was speculated that the bank was considering a sale of its private equity company portfolio for approx. $700M. The embattled Thomas Cook [TCG.UK] also reported that it had accepted a £200M emergency facility after successfully renegotiating its debt. Meanwhile, Randgold Resources [RRS.UK] declined after revising lower its FY11 production following setbacks at Tongon Mine.
Corporate news was sparse during the session given that Q3 earnings season is over. Among notable movers, BNP Paribas [BNP.FR] rose over 3% following a financial report in which it was speculated that the bank was considering a sale of its private equity company portfolio for approx. $700M. The embattled Thomas Cook [TCG.UK] also reported that it had accepted a £200M emergency facility after successfully renegotiating its debt. Meanwhile, Randgold Resources [RRS.UK] declined after revising lower its FY11 production following setbacks at Tongon Mine.