January 8, 2019 / 8:49 AM / 4 months ago

European shares hit 3-week high on trade hopes, Italy bank gains

MILAN, Jan 8 (Reuters) - European shares hit a three-week high on Tuesday as hopes of a possible trade deal between China and the U.S. offset worries over global growth and Italian banks rose after Rome moved in support of troubled lender Carige.

The pan-European STOXX 600 benchmark rose 0.6 percent by 0832 GMT, while euro zone stocks and UK’s top share index FTSE both rose 0.5 percent.

Italian banks rose 0.9 percent, also hitting a three-week high and outperforming gains in their European peers. The Italian government approved late on Monday a decree aimed at shoring up the bank, offering it access to a series of state-support options including recapitalisation.

Shares in Carige were not trading, having been suspended last week by market regulator Consob, while shares in the country’s top lenders Intesa Sanpaolo and UniCredit were up around 1 percent.

Strength among retailers also propped up the market.

Their sectoral index rose 1.4 percent, as gains in France’s Carrefour, up more than 3 percent following a Bank of America Merrill Lynch upgrade to buy, helped more than offset a disappointing update from UK’s Morrison.

Shares in Britain’s fourth-largest supermarket group fell 2.6 percent after it missed Christmas sales forecasts as weak consumer demand hit its retail and wholesale businesses.

Elsewhere, Signify fell 6.8 percent to the bottom of the STOXX 600 after a downgrade to neutral from Bank of America Merrill Lynch, while Rotork was the top gainer on the index, up 6.1 percent after it was upgraded by the same broker. (Reporting by Danilo Masoni; editing by Josephine Mason)

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