Europe close: Markets mixed as investors look for an Italian Christmas

European stocks were mixed on Thursday, with Italy’s in the red as investor confidence in a state bailout for the country’s third largest lender Banca Monte dei Paschi di Siena wavered.

The benchmark Stoxx Europe 600 index fell 0.31% to 359.45, France's CAC 40 was up 0.02% to 4,834.63, London's FTSE 100 was 0.32% firmer at 7,063.68, and Germany’s DAX was down 0.11% to 11,456.10.

Milan’s FTSE MIB was 049% lower at 19,121.26.

Shares in beleaguered lender Banca Monte dei Paschi di Siena fell 7.48% - over the past year it has lost 86% of its value.

It failed to pull off a last-ditch rescue plan to secure an anchor investor for its offer of new shares, with the government expected to step in as early as Thursday.

Italian daily Il sole 24 reported that the state rescue is likely to be carried out in different stages and will take two to three months to complete.

On Wednesday, Italy's lower house of parliament and Senate approved a government request to borrow up to €20bn to underwrite the country's banking sector.

The country’s other banks pushed higher - Banca Popolare di Milano was up 2.62%, Banco Popolare Societa Cooperativa was 2.45% firmer and UniCredit was up 0.64%.

Mike van Dulken, head of research at Accendo Markets, said: “Risk appetite remains hampered by thinner holiday trading into Christmas as well as talk of a Monte dei Paschi bailout taking a whopping three months to complete, taking us well beyond a supposed 31 December deadline for shoring up Italy's knackered banks.

“An official announcement still eludes markets which understandably want clarity on the issue. FTSE helped by defensives - healthcare, consumer staples - rather than risky names - miners, banks.”

Oil prices were higher, with Brent crude up 0.96% to $54.99 per barrel and West Texas Intermediate adding 0.76% to $52.89.

In corporate news, Swiss biotech group Actelion rose 4.14% after saying it has entered into exclusive negotiations with Johnson & Johnson regarding a possible strategic transaction.

Legal & General nudged 0.22% higher after it poached Ernst & Young senior partner, Jeff Davies, to be its chief financial officer.

Pay-TV broadcaster Sky was up 0.2% as Credit Suisse cut its rating on the stock to ‘neutral’ from ‘outperform’ following the offer from 21st Century Fox, but lifted its price target to 1,075p from 980p in line with the offer price.

Broadcaster ITV edged up 0.91% following an upbeat research note by Macquarie.

On the downside, Nokia slumped 4.91% after saying it has filed a number of lawsuits against Apple for the violation of technology patents.