December 7, 2016 / 8:42 AM / 8 months ago

European shares on a fourth quarter high as banks gain further ground

2 Min Read

Traders work at their desks in front of the German share price index, DAX board, at the stock exchange in Frankfurt, Germany, November 18, 2016.Staff/Remote

LONDON (Reuters) - European shares rose on Wednesday with the regional banking index hitting an 11-month peak after Credit Suisse announced further costs cuts and Italian banks poised for their best two-day run since 2012.

The STOXX Europe 600 Banks index .SX7P was up 1.6 percent after climbing to its highest level since January. Credit Suisse (CSGN.S) rose 4 percent after announcing more than 1 billion Swiss francs (782.04 million pounds) in extra cost cuts.

Italian banks .FTIT8300 rose 2.2 percent, with Reuters exclusively reporting Italy was preparing to take a 2 billion euros controlling stake in Monte dei Paschi di Siena (BMPS.MI) as the bank's hopes of a private funding rescue faded following Prime Minister Matteo Renzi's decision to quit.

Italian banks are now up nearly 12 percent since Monday's close.

Shares in Monte dei Paschi di Siena were up 8.9 percent, a day after Italian banks climbed 9 percent on short covering before a European Central Bank meeting this week and after Italian Prime Minister Matteo Renzi said he would step down following the referendum's defeat.

Miners tracked stronger metals prices, with the European sector index .SXPP rising 2.1 percent. The STOXX 600 was up 0.6 percent in early trades.

Reporting by Atul Prakash, Editing by Vikram Subhedar

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