Europe stocks squeeze out gains; Milan falls
December 10 2016 12:10 AM
Pedestrians stand outside the administrative offices of Monte dei Paschi in Siena, Italy. Milan shares ended 0.7% lower, dragged down by Monte dei Paschi di Siena, whose stock tumbled over 10%.


Global stock markets eked out further gains yesterday after a strong week, but Milan equities were held back by more bad news for the world’s oldest bank, Monte dei Paschi.
Key European indices rose by up to around half a percent as positive sentiment inspired by the European Central Bank’s continued support for the eurozone spilled over from Thursday.
London’s FTSE 100 was 0.3% at 6,954.21 points, Frankfurt’s DAX 30 was up 0.2% at 11,203.63 points,
Paris’s CAC 40 was up 0.6% at 4,764.07 points, and Milan’s FTSE MIB  was 0.7% down at 18,292 points at close.
“Markets across Europe are clinging stubbornly onto the gains made throughout the week,” said Joshua Mahony, analyst at IG trading group.
Guillaume Garabedian, asset manager at Meeschaert Gestion Privee in Paris, said he even detected “a kind of end-year euphoria” in the market.
London saw a late flurry of activity after European pay-TV broadcaster Sky said it had received an informal takeover approach from US media-entertainment giant 21st Century Fox.
Sky shares closed 26.7% higher at £10, which compares with a £10.75 price tag per share in the offer.
With Thursday’s ECB meeting out of the way, next week’s Federal Reserve meeting is now the main focus for markets, analysts said.
“The key to the meeting is likely to be how many rate hikes the Fed is forecasting for next year given that markets are currently only pricing in one by November,” said analyst Craig Erlam at Oanda.
Wall Street was slightly firmer around midday in New York.
Milan shares bucked the trend, ending 0.7% lower, dragged down by Monte dei Paschi di Siena (BMPS), whose stock tumbled over 10% after reports the ECB had denied it more time to raise the cash it needs to avoid being wound down.
BMPS on Wednesday asked the European Central Bank for two more weeks to find the funds, saying political instability created by Prime Minister Matteo Renzi’s resignation had left investors reluctant to commit funds.
But the ECB’s supervisory board was reported to have said “no” yesterday, upping pressure on the Italian government to bail out the ailing institution.
Such a move would probably not, however, go unchallenged by the EU if it violates state-aid rules, analysts said.
Focus was also on the oil market as Opec and non-Opec crude producing nations meet in Vienna on Saturday to nail down details on implementing a deal to cut output.
After months of disagreement, Opec members last month hammered out a deal to cut oil output for the first time in eight years.
Moscow — which is not a member of the oil cartel — has said it is ready to reduce crude output by 300,000 barrels a day in the first half of 2017.

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