November 23, 2018 / 8:37 AM / in 17 days

Italian stocks lead Europe in recovery driven by banks, technology

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LONDON, Nov 23 (Reuters) - European shares climbed modestly at the end of a volatile week, with banks and technology stocks, which have been hit hard by growth worries, leading the way, while Italian stocks rallied as bond yields fell.

The pan-European STOXX 600 managed a 0.2 percent gain by 0830 GMT, while Italy’s FTSE MIB outperformed with a 0.8 percent rise.

Italian banks climbed after a press report that Italy’s EU Affairs Minister Paolo Savona is considering resigning over the government’s decision to challenge European Union budget rules. Savona denied the report.

The banks index climbed 2 percent as bond yields slid, boosting lenders who have large sovereign bond portfolios.

Banco BPM shares rose 3.1 percent, while Mediobanca, Unicredit, UBI Banca, and Intesa Sanpaolo gained 1.3 to 1.8 percent.

Renault shares climbed 3.2 percent in a modest recovery after the carmaker dropped 8.4 percent on Monday when CEO Carlos Ghosn was arrested over allegations of financial misconduct.

Ericsson shares rose 2.1 percent and Nokia climbed 1.3 percent as traders saw a positive read-across from a Wall Street Journal report that the U.S. government is asking allies to shun telecoms equipment from China’s Huawei.

Earnings disappointments drove the biggest losses on the STOXX.

Shares in stone wool insulation maker Rockwool dropped 8.4 percent after its third-quarter results.

German industrial machinery group GEA fell 8.6 percent after it cut its outlook for 2018 cashflow margin.

M&A was a driver in the small-cap space where UK-listed regional airline Flybe surged 19 percent after Sky News reported Virgin Atlantic is in talks to acquire it. (Reporting by Helen Reid)

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