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* STOXX Europe 600 hits 3-month high
* Focus on ECB's policy meeting
* Fingerprint sinks as cuts forecast
By Atul Prakash
LONDON, Dec 8 European shares climbed to a
three-month high on Thursday, with investors betting that the
European Central Bank will extend its asset purchases after a
policy meeting later in the day.
The central bank, which aims to boost stubbornly weak price
growth, will announce its main policy decisions at 1245 GMT,
followed by ECB President Mario Draghi's news conference at 1330
The timing of the ECB meeting is crucial for the market as
heightened political uncertainty in the region has been making
investors jittery. Italian Prime Minister Matteo Renzi's
resignation following a crushing referendum defeat is the latest
example, with focus turning to elections in France and Germany.
"Recent events in Italy leading to Prime Minister Renzi to
resign and resulting in more uncertainty for Italy and the euro
zone ... make an extension of QE by the ECB more likely," said
Markus Huber, a trader at City of London Markets, referring to
the ECB's quantitative easing programme.
"Until recently, the most likely scenario appeared to be
that the ECB would slowly reduce the amount of QE starting in
April or even earlier. However this might be pushed out much
further now as the ECB won't be risking the euro zone sliding
into a new crisis."
The pan-European STOXX 600 index rose for a fourth
straight day and was last up 0.2 percent after hitting its
highest since early September. It has gained 2.7 percent so far
this week and is on track for its best weekly gain since July.
Across Europe, Italy's FTSE MIB index was up 0.3
percent after climbing to its highest level since late May,
supported by a 1 percent rise in the country's banking index
to a five-month high.
Italian banks have gained more than 12 percent this week and
are on track for their best weekly performance in four years,
with investors betting that Renzi's resignation would not be a
disaster for the sector and the ECB and the new Italian
government would help some struggling Italian banks.
Italy's third-biggest bank, Monte dei Paschi di Siena
, rose for a third straight day and was last up 3.8
percent. The bank has asked the ECB for more time to wrap up a 5
billion euro ($5.4 billion) rescue plan that was thrown into
doubt by Renzi's resignation.
Miners were also in demand, with the regional index
rising 0.2 percent to its highest level since mid-2015, after
metals prices rose on a softer U.S. dollar and strong Chinese
commodities import figures.
Elsewhere, shares in Swedish biometric technology firm
Fingerprint Cards fell nearly 12 percent, the top
decliner in the STOXX Europe 600 index, after the company
sharply cut its 2016 revenue forecast.
Bookmakers Ladbrokes Coral and William Hill
fell 7.3 percent and 8.7 percent respectively after The Times
reported a cross-party group of MPs would demand on Thursday
stricter controls on betting machines.
(Editing by Susan Thomas)