European Markets Jumped As Banks Rally On Reports Of Italian Bailout

(RTTNews) - The European markets rallied higher Wednesday on the strength of the bank stocks. Italian banks were among the top performers on reports that Italy is preparing to take a 2 billion euros controlling stake in Monte dei Paschi di Siena. Investors are also hopeful that the European Central Bank will extend its asset purchase program at its meeting tomorrow.

European Central Bank President Mario Draghi will likely announce an extension of asset purchases by the central bank beyond March 2017 on Thursday, hoping to spread some Christmas cheer amid the high political uncertainty, especially after the 'no' vote in the Italian referendum last weekend.

The 25-member Governing Council is widely expected to leave interest rates unchanged for a sixth straight session but extend asset purchases of 80 billion euros a month by six months till September. That way, Draghi can play Santa, giving markets what they expected.

The pan-European Stoxx Europe 600 index advanced 0.82 percent. The Euro Stoxx 50 index of eurozone bluechip stocks increased 1.34 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.78 percent.

The DAX of Germany climbed 1.96 percent and the CAC 40 of France rose 1.36 percent. The FTSE 100 of the U.K. gained 1.81 percent and the SMI of Switzerland finished higher by 0.23 percent.

In Frankfurt, automaker Volkswagen jumped 2.60 percent after launching its new, stand-alone mobility services company, named Moia, which will focus on ride-hailing and on-demand pooling services.

Siemens rose 2.33 percent after the conglomerate said it aims to achieve double-digit annual growth in digital businesses.

Deutsche Bank jumped 5.25 percent and Commerzbank added 3.70 percent.

ThyssenKrupp leaped 6.42 percent and Salzgitter added 4.68 percent.

In Paris, Societe Generale climbed 3.72 percent and BNP Paribas rose 2.25 percent. Credit Agricole also finished higher by 0.93 percent.

In London, transport company Stagecoach Group rallied 2.58 percent after raising its interim dividend and retaining its annual earnings outlook.

Sage Group gained 1.45 percent. The company announced that it is evaluating potential strategic options for its North American payments business, including a sale.

The Wall Street Journal reported that Royal Dutch Shell is expected to sign deals to develop three Iranian oil and gas fields. The stock finished up by 2.12 percent.

Rio Tinto surged 6.62 percent after Credit Suisse upgraded its rating on the stock to "Outperform" from "Neutral."

Royal Bank of Scotland increased 3.87 percent and Lloyds Banking Group advanced 4.69 percent. Standard Chartered climbed 4.22 percent and HSBC added percent.

Credit Suisse surged 7.41 percent in Zurich. Market conditions have forced the Swiss banking giant to announce more than 1 billion Swiss francs ($991 million) in extra cost cuts.

PostNL plunged 13.46 percent in Amsterdam after the postal firm rejected the fourth and final offer made by Belgian peer Bpost.

Monte dei Paschi di Siena surged 10.79 percent in Milan on reports that Italy is preparing to take a 2 billion euros controlling stake in the troubled lender.

Germany's industrial production recovered in October, figures from Destatis showed Wednesday. Industrial production grew 0.3 percent in October from September, when it declined by revised 1.6 percent. Nonetheless, the pace of growth was weaker than the expected 0.8 percent increase.

France's trade deficit widened unexpectedly in October, as exports declined though imports remained firm, data from the French Customs showed Tuesday. The trade deficit rose to EUR 5.20 billion from EUR 4.79 billion in September and EUR 4.48 billion a year ago. Economists had forecast a shortfall of EUR 4.35 billion.

The French current account gap narrowed in October from a month ago, the Bank of France reported Wednesday. The current account deficit fell to EUR 3.5 billion in October from EUR 3.7 billion in September.

British industrial output declined unexpectedly in October as the shutdown for maintenance of oil fields dampened production, the Office for National Statistics reported Wednesday. Industrial production declined 1.3 percent from September, the biggest fall since September 2012. Economists had forecast an increase of 0.2 percent after a 0.4 percent fall in September.

U.K. house prices grew at a slower pace in November from October, data published by the mortgage lender Halifax showed Wednesday. House prices increased 0.2 percent month-on-month in November, in line with expectations, but slower than the 1.5 percent rise seen in October. Nonetheless, prices have increased for the third straight month.