Investors pushed Italian stocks to new highs for the month on hopes that the re-election of the country’s president would pave the way for an end to months of political deadlock.
The FTSE MIB rose 1.7 per cent to 16,021.71, with banks helping to lead the rally.
Italian insurer Generaliwas the best performing stock, boosted by an upgrade from Barclays.
The analysts changed their ratings from “equal weight” to “overweight” and increased their target on the share price from €12.40 to €14.10. Its shares rose 5.2 per cent to €13.48.
Banco Popolarerallied 4.5 per cent to €1.10. Its shares have lost more than 20 per cent since Italian elections in February.
UniCredit, Italy’s largest lender, gained 2.7 per cent to €3.73.
More widely, European markets shrugged off last week’s weakness. The FTSE Eurofirst 300 index rose 0.2 per cent to 1,155.00.
French lender Natixisprofited from a rating upgrade as investors sent its shares rallying 4.3 per cent to €3.23.
Analysts at Credit Suisse raised their rating on the shares from “neutral” to “outperform” and increased the target on the lender’s share price from €3.20 to €4.20.
“Natixis offers a good mix of cash return to shareholders and gains from potential improvements in its core business activities,” the analysts wrote, citing Natixis’ plan to pay a special dividend in September.
“We estimate it could generate €1.907bn of excess capital (€0.60 a share) in two to three years on the back of disposals and run-offs in its non-core assets and businesses,” they added.
The CAC 40 index in Paris was flat at 3,652.13.
Philipsslid to the bottom of the Eurofirst 300 leaderboard after it disappointed investors with its first-quarter results.
Europe’s largest electronics group said earnings before interest, taxes and amortisation fell 11 per cent to €402m compared with the previous year.
The group’s first-quarter sales slipped by 1 per cent €5.26bn. Its shares lost 5.2 per cent to €20.54.
Get alerts on Banco Popolare Societa Cooperativa SCRL when a new story is published