EUROPEAN shares hit a seven-year high yesterday, rising for a third day as Italian banks rallied on the prospect of a corporate governance revamp, and Swiss stocks clawed back some of last week’s losses.
Broader market sentiment has been supported by expectations the European Central Bank will unveil plans to buy sovereign bonds on Thursday, to try to fight deflation and revive growth.
Analysts expect the ECB to buy €500bn of sovereign bonds.
Shares in co-operative Italian banks rose on the back of a draft government decree which would abolish a rule granting one vote to each shareholder regardless of the size of their stake.
Popolare Milano, Banca Popolare dell'Emilia Romagna, Banco Popolare and UBI were up between eight per cent and 14 per cent.
Swiss bank Julius Baer was the top gainer among larger European stocks as it rose 5.9 per cent.
The private bank said it did not suffer any losses in the two trading days after the Swiss National Bank’s decision to abandon a three-year cap on the franc.
The Swiss benchmark index SMI was up 3.2 per cent having shed 13 per cent last week after the central bank’s shock decision sent the franc soaring, denting the attractiveness of Swiss exports.
The FTSEurofirst 300 index of top European shares closed 0.2 per cent higher at 1,409.92 points, after hitting the highest level since early 2008 at 1,418.11 points.
The index cut its gains shortly before the close, with oil and basic resource stocks weighing it down.