Italian banks help European shares snap losing streak
October 22, 2018
European shares rose in early deals on Monday after Moody's decision to keep Italy's sovereign rating stable eased worries over a sell-off in the country's government bonds, boosting shares in Italian banks.
Italian banks, which are heavily exposed to government bonds, rose more than 3 percent, driving European banks (SX7P) higher and helping the pan-European STOXX 600 (STOXX) index rise 0.4 percent following three straight days of losses.
Autos (SXAP) were also in demand with Fiat Chrysler (MI:FCHA) gaining 4.3 percent after the Italo-American car maker agreed to sell its Magneti Marelli unit in a 6.2-billion-euro ($7.16 billion) deal. A pledge from German Chancellor Angela Merkel to ward off diesel driving bans gave to support to German carmakers.
Salvatore Ferragamo (MI:SFER) topped the leader board, rising 7 percent and hitting a one-month high after Wanda Ferragamo, the honorary president and shareholder of the Italian shoemaker died at the age of 96.
Philips (AS:PHG) was a weak spot, down 5.2 percent, after core profit growth at the Dutch healthcare technology company missed analyst estimated, partly due to currency headwinds.
Ryanair (I:RYA) rose 3.2 percent even after it reported a 7-percent fall in profit during its key April-September season on Monday and said European short-haul airfares would remain soft this winter. Traders said there were no negative surprises in the airline's results following the recent profit warning.