April 8, 2016 / 8:42 AM / 2 years ago

Commodities stocks and Italian banks boost European equities

(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)

* FTSEurofirst 300 index up 0.7 percent

* Resource-related stocks among top gainers

* Italian banks surge on likely state support

By Atul Prakash

LONDON, April 8 (Reuters) - European equities bounced back on Friday as Italian banks rallied and firmer prices of metals and oil boosted resource-related stocks, although a pan-European index was on track for its fourth straight week of losses.

The STOXX Europe Basic Resources and the Oil and Gas indexes rose 1.9 percent and 2.1 percent respectively, the top two sectoral gainers, after oil advanced on expectations of increased fuel demand following firm economic indicators from the United States and Germany. Metals prices were also firmer.

Shares in Glencore, BHP Billiton and BP rose 2.0 to 2.4 percent.

Italian banks surged, with UniCredit gaining 6.7 percent, the top gainer in the FTSEurofirst 300 index.

Traders linked the spike to news saying an Italian plan to set up a state-backed fund that would help troubled lenders by buying up bad loans and plug capital shortfalls should be ready by Monday.

“The market gave zero credibility to this but a delivery during the weekend could trigger a squeeze after the huge selloff as systemic risk would be reduced,” a Milan trader said.

Shares in UniCredit, Italy’s biggest bank by assets, also got some support from optimism over a cash call at smaller rival Popolare Vicenza, which UniCredit is guaranteeing.

Italian shares outperformed the broader market, with the benchmark FTSE MIB index rising 2.4 percent. Shares in Italian banks BMPS, Banco Popolare and UBI Banca jumped more than 6 percent.

The FTSEurofirst 300 index was 0.7 percent higher by 0816 GMT after closing 0.8 percent lower in the previous session, when the index slipped to a one-month low. It is still down nearly 10 percent this year and remained set for another weekly decline.

German shares, up 0.6 percent, were also underpinned by a survey showing the country’s exports bounced back and rose more than expected in February, in a sign that foreign demand for goods from Europe’s biggest economy was picking up again.

German publisher Axel Springer rose 6 percent to a three-month higher after JP Morgan upgraded the stock to “overweight” from “neutral” and said the company had reached a tipping point, thanks to the transition from print to online.

However, Gjensidige, UPM-Kymmene and Swisscom fell 4.7 to 6.0 percent, the worst performers in the FTSEurofirst 300 index, after their shares traded without the entitlement of their latest dividend payouts.

Today’s European research round-up

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

If you have any thoughts, suggestions or feedback on this, please email mike.dolan@thomsonreuters.com.

Mike Dolan, Markets Editor EMEA.

Additional reporting by Danilo Masoni in Milan; Editing by Keith Weir

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