Stocks up as Italy's senate adopts austerity package

Eurostoxx 50: 2,324.81 (+69.89) Frankfurt DAX: 6,057.03 (+189.22) Paris CAC: 3,149.38 (+84

Eurostoxx 50: 2,324.81 (+69.89) Frankfurt DAX: 6,057.03 (+189.22) Paris CAC: 3,149.38 (+84.54)EUROPEAN STOCKS advanced yesterday, recouping this week's losses, after the Italian senate approved an austerity package, raising optimism that the euro area's second-most indebted country will contain the debt crisis.

The Stoxx Europe 600 Index rose 2.4 per cent to 240.98 at the close in London.

“In the eyes of financial markets, Mario Monti seems to be the best possible choice at present,” said Alessandro Fezzi, senior market analyst at LGT Capital Management in Pfaeffikon, Switzerland. “He might even win back market confidence. Even so, the success of the painful reforms is by no means guaranteed and financial markets will soon test the new government.”

The senate in Rome voted to pass the package of measures promised to the European Union in a bid to boost growth and cut Italy’s debt of €1.9 trillion.

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Telecom Italia jumped 5.3 per cent to €89.1 after third-quarter net income surged 33 per cent to €807 million, beating analysts’ estimates for €708.5 million.

Banks and insurers paced gains. BNP Paribas jumped 5.7 per cent to €32.24.

National Bank of Greece gained 2.5 per cent to €2.09 and Alpha Bank added 2.9 per cent to €1.08.

Schroders climbed 6.8 per cent to 1,393p and KBC rallied 8.8 per cent to €13.84.

Allianz, Europe’s biggest insurer, rose 5.6 per cent to €76.25 after saying it is “ready to take a closer look” at assets such as mortgages that some troubled banks may sell.

Mapfre gained 7 per cent to €2.62 as a gauge of European insurers was the best performer of the 19 industry groups on the Stoxx 600.

Aegon added 5.5 per cent to €3.36, while AXA increased 4 per cent to €10.61.

Vivendi jumped 2.6 per cent to €15.87 after its Universal Music unit agreed to buy the recorded-music assets of EMI from Citigroup.

Aker Solutions, Norway’s biggest oil rig maker, rallied 8.5 per cent to 71.50 kroner after the company signed a contract with Lundin Petroleum to build a 700 million kroner subsea production system for the Brynhild project on the Norwegian continental shelf. – (Bloomberg)