Italian bank deal and Nestle lift stocks
European shares rose on Monday as banks rallied after Italy reached a deal to wind up two failed regional banks and Nestle climbed to a new record after an activist investor urged changes at the consumer bellwether.
Italy began winding up two failed Veneto region banks on Sunday in a deal that could cost taxpayers up to €17bn but puts an end to a long-running crisis and leaves the lenders' good assets in the hands of Intesa Sanpaolo.
"The announcement of definitive steps to resolve the two Veneto banks should be seen as a positive for Italian banks and the broader sector (albeit at a high cost)," said Jefferies analyst Benjie Creelan-Sandford.
"Intesa, as acquiror of the 'good' assets, also looks to be getting a good deal," he added.
Shares in Intesa, Italy's largest retail bank, rose 3.2pc while the eurozone bank index rose 1.3pc.
At home, AIB shares rose 2.5pc to €4.77 each, well clear of Friday's €4.40 a share issue price.
Bank of Ireland continues to lag its main rival, with shares down almost half a percent to 22.6 cent each. Gains in bank stocks helped the pan-European STOXX 600 and the eurozone blue chip indexes rise 0.6pc and 0.7pc respectively, while UK's FTSE added 0.6pc. Further supporting sentiment was a survey showing that German business confidence unexpectedly rose in June to a record high, a fresh sign that company executives are more upbeat about the growth outlook of Europe's largest economy. The German blue chip index added 0.6pc.
Nestle led STOXX gainers, up 4.3pc. Activist investor Daniel Loeb's Third Point unveiled a stake of more than 1pc, urging the group to improve its margins, buy back stock and sell its stake in L'Oreal.