Europe close: Italian lenders boosted by ECB talk
European stocks edged higher on Tuesday, recovering from the previous session's losses after a report said the European Central Bank would step in to help to calm markets should the fast-approaching Italian referendum result in market dislocations.
The benchmark Stoxx Europe 600 index gained 0.33%, France’s CAC 40 advanced 0.91% and Germany’s DAX rose by 0.36%.
Italy's FTSE MIB was the standout gainer, up 2.13%, following a Reuters report citing four Eurozone central bank sources according to whom the ECB is prepared to momentarily step-up its purchases of the country´s government debt to help smoothe market moves
Prime Minister Matteo Renzi has said he would resign if his proposals for Constitutional reform are rejected, which would lead to political uncertainty. Some investors are worried that this would make the task of sorting out banks' non-performing loan issues even more difficult.
The yield on benchmark 10-year Italian government debt fell by 12 basis points to 1.94% while shares in Banca MOnte dei Paschi di Siena snapped back, rising by 17.46%.
Oil prices retreated as the Indonesian energy minister said he was "not optimistic" that an output deal will be agreed at the OPEC meeting in Vienna on Wednesday. West Texas Intermediate and Brent crude fell by 4.2% and 3.8% to $45.22 and $46.48 a barrel, respectively.
Meanwhile, basic resources were among the worst performers, with the Stoxx 600 sub-index for the sector down 1.47% as copper prices fell.
On the data front, the European Commission’s headline economic sentiment index edged up to 106.5 in November from a revised 106.4 in October, missing economists’ expectations for a reading of 107.0. The EC said the virtually unchanged sentiment resulted from a mild deterioration in industry confidence and stable readings in services, which offset more upbeat assessments of construction and retail trade managers, as well as consumers.
In corporate news, Actelion jumped sharply after Bloomberg reported that US rival Johnson & Johnson had upped its previous bid for the company.
Deutsche Lufthansa reversed losses after it lost a German court bid to prevent pilots from resuming strikes on Tuesday in a labour dispute that has caused thousands of flight cancellations this month.
BT Group edged higher even after Ofcom ruled it must legally separate from its Openreach infrastructure arm due to its failure to satisfy the regulator's competition concerns.
BT made a move late on Monday to try and prevent the enforced spin-off with the appointment of a former director of the telecoms regulator, Mike McTighe, as chairman of Opeanreach but this seems not to have proved sufficient.