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Italian stocks, banks surge on reports government to tweak deficit plan

Stock MarketsNov 26, 2018 03:44AM ET
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© Reuters. FILE PHOTO: The Milan's stock exchange building is seen during the opening of the initial public offering of the Poste Italiane in downtown Milan

LONDON (Reuters) - Italian stocks jumped on Monday on accumulating signs of a climbdown from the Italian government whose budget deficit plans had set it on course for disciplinary action from the European Union.

The governing coalition is discussing reducing next year's budget deficit target to as low as 2 percent of gross domestic product from the draft budget target of 2.4 percent of GDP, a government source said on Monday.

The pan-European STOXX 600 climbed 1.1 percent, leading euro zone stocks (STOXX50E) jumped 1.3 percent, and Italy's FTSE MIB (FTMIB) led the way by far with a 3-percent gain.

Italy's banks index (FTIT8300) jumped 5.3 percent, on track for its strongest day since June.

Unicredit (MI:CRDI) and Intesa Sanpaolo (MI:ISP) were the top Italian gainers and among top European stocks, up 4.7 and 4.3 percent respectively. Lenders UBI Banca (MI:UBI), Banco BPM (MI:BAMI), BPER Banca (MI:EMII), and Mediobanca (MI:MDBI) rose 3.7 to 4.1 percent.

Outside politics, dealmaking drove the biggest moves.

Faroe Petroleum (L:FPM) shares surged 22.4 percent after Norway's DNO (OL:DNO) offered to buy it for 152 pence per share in cash - a 20.8 percent premium to its Friday closing price - valuing it at 607.9 million pounds ($779.81 million).

Melrose Industries (L:MRON) meanwhile tumbled 4.8 percent after a Sky News report that the industrial company had got lower-than-expected bids for its Powder Metallurgy unit.

Eurofins Scientific (PA:EUFI) rose 5.6 percent after the laboratory testing firm extended its organic growth objectives beyond 2020, and Berenberg raised the stock to "buy" from "hold".

Dutch marine engineer Boskalis (AS:BOSN) jostled for pole position with Eurofins, with its shares climbing 6 percent after it said it had signed a multi-year deal with Saudi Aramco to work on its offshore facilities.

Boskalis would act in a consortium with Lamprell (L:LAM), whose shares also jumped 8.9 percent on the deal win.

(This story corrects percentage move in paragraph 4 to 5.3, not 53)

Italian stocks, banks surge on reports government to tweak deficit plan
 

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