European shares led up by Italy on political hopes

PARIS, April 22 Mon Apr 22, 2013 3:17am EDT

PARIS, April 22 (Reuters) - European shares were led higher by the Italian blue-chip index on Monday, after sharp falls in the previous week, as investors bought back into the cheap market following signs of political progress there.

Milan's FTSE MIB index rose 1.8 percent after the re-election of Italy's president following a broad agreement between political groups raised the prospect that a new government could be formed.

Banco Popolare surged 4.9 percent and UniCredit gained 3.5 percent.

At 0704 GMT, the FTSEurofirst 300 index of top European shares was up 0.7 percent at 1,160.61 points, while the euro zone's blue-chip Euro STOXX 50 index was up 0.9 percent at 2,598.37 points.

The broader backdrop remained one of concern around a series of weak economic and corporate data releases, in spite of the easy monetary policies being employed by many central banks, however.

"The market has been quite resilient because everyone knows that central banks, and especially the ECB, still have ammunition left to support the economy," Philippe de Vandiere, analyst at Altedia Investment Consulting.

"But that said, we're a bit cautious because there's just no visibility from companies and macro data shows that Europe continues to sink while growth in the United States is quite sluggish."

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