* STOXX 600 up 0.2 percent
* Banks lead sectoral fallers led by UniCredit
* Healthcare stocks rebound
* Gemalto surges after acquisition (Live coverage of European markets now available on cpurl://apps.cp./cms/?pageId=livemarkets) Adds details, updates prices)
By Danilo Masoni
MILAN, Dec 9 (Reuters) - European shares steadied near 11-month highs on Friday after a strong week in which investors snapped up beaten-down bank stocks on hopes a way could be found to save ailing Italian lender Monte dei Paschi di Siena .
Equities got a boost on Thursday after the European Central Bank said it would scale back its monthly asset purchases, a surprise move that lifted euro zone bond yields, which in turn are seen helping reduce pressure on bank profits.
But the rally lost some momentum on Friday.
“After yesterday’s stormy developments, the markets are likely to settle down at the end of the week,” BayernLB analyst Alexander Plenk said in a note.
The STOXX 600 was up 0.2 percent by 1015 GMT as gains among drug makers were partly offset by a pull-back in banks. The pan-European index was on track to end the week up nearly 4 percent, its best week since February.
Europe’s STOXX bank index was down 1.1 percent, leading sectoral fallers as profit-taking kicked in after the index’s best week in five years.
Monte dei Paschi fell 1.1 percent. The stock has gained around 10 percent this week on bets a way can be found to rescue the ailing lender, even involving state aid.
Such expectations helped shrug off concerns over political instability after Prime Minister Matteo Renzi’s resignation on the back of a resounding defeat on Sunday in a referendum on his plans for constitutional reform.
Italian newspapers said the ECB would decide on Friday on whether to approve a request from Monte Paschi for an extension to Jan. 20 of a deadline to complete its capital increase.
UniCredit fell more than 4 percent, making it one of the heaviest fallers in Europe. Italy’s largest lender is set to announce next week the country’s biggest bank share issue, which could be worth up to 13 billion euros according to sources.
Bank of Ireland fell almost 5 percent after one its shareholders who helped keep the bank out of state hands in 2011 announced a sale of part of its stake.
Elsewhere on the broader market, Amsterdam-based digital security company Gemalto rose 6.6 percent, making it the biggest STOXX gainer, after agreeing to buy 3M’s identity-management business for $850 million.
Among other strong gainers, cable company Altice rose 4 rise after saying it was exploring the possibility of listing a minority stake in its U.S. subsidiary.
Europe’s healthcare index rose 1.8 percent, leading sectoral gainers, having been out of favour recently on concerns over pricing pressure in the United States. (Reporting by Danilo Masoni; Editing by Hugh Lawson)