Final hours! Save up to 55% OFF InvestingProCLAIM SALE

European shares rebound as Italy eases bank levy stance

Published 08/09/2023, 03:17 AM
Updated 08/09/2023, 12:25 PM
© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, August 8, 2023.    REUTERS/Staff/File Photo
IT40
-
HG
-
STOXX
-
BNPQY
-
ISNPY
-

By Shashwat Chauhan, Amruta Khandekar and Shristi Achar A

(Reuters) -European shares hit a one-week high on Wednesday on a boost from energy stocks and as Italian lenders rebounded from the previous session's sharp losses after the government eased its stance on the windfall tax on banks.

Euro zone banks gained 1.4% after a 3.5% slump a day earlier, as Italy's government announced late on Tuesday a cap on a windfall tax for the country's lenders. It clarified that the 40% windfall tax would not amount to more than 0.1% of their total assets.

Italian lenders such as Finecobank (MI:FBK), Banco BPM and UniCredit added between 4.3% and 7.1%while the banks-heavy FTSE MIB index rose 0.4%.

"We've had some watering down of the policy from yesterday, and what it looks like is the impact should be less severe, but still a tax, nonetheless," said Ankit Gheedia, head of equity and derivatives strategy at BNP Paribas (OTC:BNPQY).

The pan-European STOXX 600 ended up 0.4%, with data showing China slipped into deflation also providing a boost to risk sentiment.

""Equity traders are looking through that disappointing news to think that maybe that brings us closer to getting some meaningful stimulus out of China." said Steve Sosnick, chief strategist at Interactive Brokers (NASDAQ:IBKR).

The oil and gas index advanced 2.3%, posting its best day in two months as oil prices hit their highest levels since April. [O/R]

The focus will shift to U.S. inflation data due on Thursday, with investors looking to see whether the Federal Reserve will raise interest rates again this year.

Meanwhile, earnings for STOXX 600 companies are expected to have fallen 4.8% in the second quarter, according to Refinitiv IBES data, a clear improvement from the 8.2% drop estimated at the start of the earnings season.

Delivery Hero advanced 4.7% after the German online takeaway food company raised its full-year revenue outlook.

Hiscox dropped 6.0% after the Lloyd's of London insurer's weaker retail growth outlook overshadowed its profit jump in its first-half results.

© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, August 8, 2023.    REUTERS/Staff/File Photo

Flutter Entertainment lost 4.4% after the world's largest online betting firm posted a 76% jump in half-year core profit but warned of a weaker Australian market outlook.

The stocks dragged the Irish stock index down 1.3%, making it the only decliner among European bourses.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.