By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Italy's benchmark stock index ended
higher on Monday following a roller-coaster ride as investors
considered various reports about the likely outcome of the nation's
general election.
Most other European benchmark indexes also posted gains.
Italy's FTSE MIB index climbed 118.71 points, or 0.7%, to finish
at 16,351.99.
Italians voted in a general election on Sunday and Monday, with
investors eagerly awaiting the results to see if Italy can manage
to form a stable and effective government that will continue the
austerity agenda now in place.
Exit polls from the election on Monday pointed to a lead for the
center-left bloc of Pier Luigi Bersani. That news initially buoyed
the Italian stock index to an intraday high of 16,883.31, but it
pared gains after media reports said that an early vote count
showed that the center-right group of former Prime Minister Silvio
Berlusconi was leading in the Senate race.
The outcome of the election thus remains uncertain until all
votes are counted and official results are announced.
The pan-European Stoxx 600 index slipped 0.1% to end at 288.40,
though most other country-specific indexes gained.
"Leading up to the Italian election many investors were also
closing out their short positions last week and there is a
continuation of that today," said Predrag Dukic, senior equity
sales trader at CM Capital Markets.
"Markets are pricing in a more stable center-left leaning and
euro-friendly coalition, and should we see a surprise, we could
obviously see a very different afternoon," he said.
Leading up to the election, both Italian and European stock and
bond markets had been shaky on worries that a strong showing by
Berlusconi would derail Italy from its current reformist drive.
For the broader European stock markets, most indexes started out
on a strong footing, boosted by a positive trading session in Asia.
Japanese shares soared to the highest closing level since September
2008, following reports that Asian Development Bank chief Haruhiko
Kuroda could be the country's next central bank governor. .
Germany's DAX 30 index rose 1.5% to 7,773.19.
Shares of Deutsche Boerse AG rallied 5.6%. Bloomberg News
reported that CME Group Inc. (CME) had approached the German
exchange about a tie-up, but Deutsche Börse said it is not in
merger talks with CME.
Shares of K+S AG gained 2.6% after Citigroup lifted the
chemicals firm to buy from neutral.
France's CAC 40 index rose 0.4% to 3,721.33, with shares of
Vivendi SA up 3.2%. French TV BFM reported that
private-equity-owned French cable operator Numericable is preparing
a cash offer for Vivendi's telecom operator SFR. A representative
from Vivendi said that "SFR is not for sale". .
The U.K.'s FTSE 100 index gained 0.3% to 6,355.37, even after
Moody's Investors Service late Friday slashed the country's credit
rating to Aa1 from Aaa. .
Pearson PLC was the biggest decliner in the FTSE 100, with its
shares down 3.7% after the publishing firm said it expected tough
trading conditions and structural industry changes to continue in
2013.
BP PLC (BP) rose 1.6% after a report in The Wall Street Journal
said that the U.S. Justice Department and Gulf Coast states were
considering offering the oil major a deal in which BP would pay $16
billion to settle civil claims related to the 2010 Deepwater
Horizon accident. A representative from BP declined to comment.
Shares of Reckitt Benckiser PLC slumped 3% after the
consumer-goods firm said it was disappointed with the U.S. Food and
Drug Administration's decision to deny a citizen's petition filed
by the RB Pharmaceuticals business. .
Among other notable movers in Europe, shares of Nokia Corp.
(NOK) gained 1%, as the handset maker launched new Windows
smartphones in the midrange and lower price segments in an effort
to boost sales. .
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