EUROPEAN stocks gained ground yesterday in light trade, with Italian shares outperforming after the country’s Senate expelled former Prime Minister Silvio Berlusconi, fuelling hopes of stability for the current government.
The FTSEurofirst 300 index of top European shares gained 0.4 per cent at 1,305.02 points, hitting its highest closing level since 2008.
Volumes were thin, however – representing only about two-thirds of an average session of the past three months – as Wall Street was closed for the Thanksgiving holiday.
Italian shares were in focus, with Milan’s FTSE MIB rising 0.9 per cent, led by banks such as UniCredit, Intesa Sanpaolo and UBI Banca, up 1.7 to 2.2 per cent.
Late on Wednesday, the Italian Senate expelled Berlusconi over his tax fraud conviction, while Prime Minister Enrico Letta said his government would press on with its reform programme.
Italian shares have been outpacing the broader market since June, with the MIB surging 28 per cent while the broad Stoxx Europe 600 gained 18 per cent.
But despite the outperformance, Italian shares remain among the cheapest across Europe, trading at 12 times expected earnings in the next 12 months, while the Stoxx 600 trades at 13.5 times.
Around Europe yesterday, the Eurozone’s blue-chip Euro Stoxx 50 index gained 0.3 per cent, to 3,092.42 points, France’s CAC 40 gained 0.2 per cent and Germany’s DAX index rose 0.4 per cent.