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BREAKING NEWS

BREAKING NEWS

European shares extend rally as Italy hopes offset Brexit clouds

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European shares
European shares -
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STAFF(Reuters)
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European shares rose for a third day running on Thursday as hopes over a compromise over Italy's contested budget and easing concerns over trade offset persistent uncertainty over Britain's exit from the European Union.

The euro zone STOXX index <.STOXXE> rose 0.4 percent while the FTSE 100 <.FTSE> lagged slightly behind, up 0.2 percent, after PM Theresa May saw off a leadership challenge but a mutiny by more than a third of her lawmakers indicated parliament was heading towards deadlock over Brexit.

The pan-European STOXX 600 benchmark <.STOXX> was up 0.2 percent.

Italian stocks outperformed with the country's banks index <.FTIT8300> up 3.2 percent after the government cut its deficit goal for 2019 with EU Commissioner Pierre Moscovici saying the bloc was having constructive talks with Rome.

Shares in Intesa Sanpaolo , Italy's largest retail bank, were among the leading gainers in Europe, up 3.7 percent, while German lenders Deutsche Bank and Commerzbank extended their rally on M&A chatter.

Plastic Omnium advanced 10.1 percent after an upbeat update from the French plastic processing group, while G4S soared 8.7 percent after the British security company said it was looking at a separation of its cash solutions business.

Top faller in Europe was Metro , down 8.3 percent after the German wholesaler predicted a fall in profits due to its struggling Russia business.