Europe open: Shares boosted by 'Super Mario' optimism
European shares rose again on Wednesday as investors took heart from positive sessions overnight on Wall Street and Asia and the prospect of political stability in Italy.
The pan-European Stoxx 600 index was up 0.85%, marking a third straight day of gains. Italy’s FTSE MIB outperformed with a 2.24% rise as former European Central Bank chief Mario Draghi was expected to be asked on Wednesday to form a government of national unity after yet another Italian coalition collapsed amid infighting.
“Draghi’s high profile gives him clout. As all three main parties of the previous government and some other smaller groups in parliament would likely do badly in potential snap elections, chances are that Draghi will be able to form a new government eventually,” said Berenberg economist Christopher Dembik.
“As before, (President Sergio) Mattarella seems determined to avoid snap elections. In a statement last night, he cited the need to steer Italy through the pandemic, to distribute the EU support funds and to reform the country as reasons to avoid new elections. Nonetheless, with the failure of the attempts to revive the old coalition, the prospect of new elections in June looms a little larger than before.”
“By officially bringing in former ECB president Draghi as a potential leader in a critical period of the pandemic, Italy seems poised to return to the model of technocratic government.”
The news spilled over into equities, with Italian stocks among the major gainers. Unicredit, Intesa Sanpaolo, Poste Italiane, Banco BPM and Atlantia were all higher.
Elsewhere, shares in German telecoms group Freenet soared after the company announced another €135m share buyback and special dividend payment.