Shares in Eni, the biggest foreign oil operator in Libya, were the top gainers in the FTSEurofirst 300 .FTEU3 index of leading European shares, rising nearly 7 percent.
Ansaldo STS, which issued a profit warning in July because of the unrest in Libya, was up 7 percent.
Ansaldo’s parent Finmeccanica SIFI.MI, the defense and aerospace company, was up 3 percent. The company has been banking on Libya to generate billions of euros of contracts and expects existing deals to be honored.
“We expect that our contracts will be respected, that they are safe,” Finmeccanica’s Chief Executive Giuseppe Orsi said on Monday.
Italy is Libya’s former colonial power and has developed increasingly close ties with the North African country in recent years in the energy, construction and defense sectors.
“As soon as (Libyan leader Muammar) Gaddafi is out, the international community will do everything it can do to restart (oil) production and that is of course why Eni is gaining,” said Per Lekander, a UBS utilities analyst in London.
Libyan government tanks shelled part of central Tripoli on Monday after the rebels entered the city. Crowds took to the streets to celebrate what they saw as the end of Gaddafi’s four decades in power.
Eni got about 14 percent of its output from Libya before the crisis. Production has fallen during the fighting, cutting Eni’s market value by about a third since a peak on February 16.
“This production is now much more safe,” a Milan trader said. Eni declined to comment.
Italy’s Foreign Minister Franco Frattini said staff from Eni had arrived to look into a restart of oil facilities in the country’s east.
“The facilities had been made by Italians, by Saipem, and therefore it is clear that Eni will play a No. 1 role in the future,” Frattini told state TV RAI.
Shares in Eni’s oil service unit Saipem (SPMI.MI) were up 3.2 percent as the STOXX Europe 600 oil and gas index .SXEP was 3.2 percent firmer. Saipem and engineering company Maire Tecnimont (MTCM.MI) were part of a consortium that won a contract to build a Libyan highway.
Maire Tecnimont, hit recently by disappointing results, is suspended from trading indicating a rise of 16.8 percent.
Additional reporting by Michel Rose; Editing by Erica Billingham and Hans-Juergen Peters