May 16, 2018 / 7:27 AM / in 3 months

Political risk hits Italian banks while European shares rise

MILAN, May 16 (Reuters) - European shares edged up on Wednesday, supported by strength among mining stocks and some solid earning updates, although a drop in Italian banks on fresh political worries weighed.

The pan-European STOXX 600 index rose 0.2 percent by 0713 GMT, hovering around its highest level since early February, while Italy’s FTSE MIB fell 0.8 percent.

Italian banks, which are seen as a proxy for political risk in the country due to their government bond holdings, fell as much as 1.1 percent as borrowing costs rose after a report that Italy’s 5-Star and League plan to ask the ECB to forgive 250 billion euros of Italian debt.

Top gainers on the STOXX were Britain’s leading software company Micro Focus International and French manufacturing group Alstom, up 5 and 6 percent respectively following their trading updates.

Elior, however, fell 15 percent following a profit warning. (Reporting by Danilo Masoni, Editing by Helen Reid)

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