The fact that Italy was finally able formed a government pushed European shares higher on Monday.
The main Milan stock market index was the best performer in the region, jumping two percent by mid afternoon.
Gainers include banks and former PM Silvio Berlusconi’s broadcast company Mediaset.
Traders see scope for further gains in Italian shares, but only on the basis that they have underperformed since February’s inconclusive election, which makes them relatively cheap for investors.
The Italian government’s borrowing costs – on bonds maturing in five and 10 years – fell to their lowest since October 2010 at an auction on Monday.
The euro was up helped by events in Italy and a weaker dollar.
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