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LONDON, June 1 (Reuters) - European shares began June on a strong footing on Friday as Italian stocks led the pack after a coalition deal appeared to end three months of political deadlock.
The pan-European STOXX 600 index rose 0.5 percent in early trading, while German stocks also gained 0.5 percent and Britain’s FTSE 100 rose 0.6 percent.
Italian stocks rallied 2.3 percent, the standout performers in Europe as Italian banks gained 3.6 percent. Recent political uncertainty has roiled Italian stocks, resulting in a slide of more than 9 percent for the Italian benchmark in May, its worst month since June 2016.
However, Italy’s anti-establishment parties revived coalition plans on Thursday, removing the risk of a repeat vote.
Away from politics, semiconductor stocks were a weak spot after shares in Dialog Semiconductor plunged 16 percent. The chipmaker said that Apple was planning on cutting smartphone power chip orders, which will shave 5 percent off Dialog’s 2018 revenues.
Peer AMS declined 2.6 percent, while STMicro edged 0.8 percent lower.
Elsewhere shares in Deutsche Bank climbed 1.8 percent higher following a drop of more than 7 percent in the previous session, after a report that the U.S. Federal Reserve last year designated the bank’s U.S. operations to be in “troubled condition”.
On Thursday, S&P downgraded Deutsche Bank’s credit rating to BBB+ from A-.
Reporting by Kit Rees Editing by Alison Williams