August 31, 2014
Italian shares lead, Germany sets record high after EU vote
European equities ended higher in thin trading today, with Italian shares outperforming the regional market after voters endorsed Prime Minister Matteo Renzi's centre-left Democratic Party's reforms in European elections.
Results from around the 28-nation bloc showed pro-European centre-left and centre-right parties will keep control of around 70 percent of the 751-seat EU legislature, but the number of Eurosceptic members will more than double.
"People were afraid that Eurosceptic parties would emerge as big winners. In some countries they are big winners, but the outcome is not as bad as feared," Koen De Leus, senior economist at KBC, in Brussels, said. "For example, election results from Italy suggest that Renzi would be able to continue his reforms."
Italy's FTSE MIB rose 3.6 percent, outpacing other major European indexes, boosted by gains in domestically focused banks including UBI Banca and BP Milano, up 6.8 percent and 7.2 percent respectively.
In Germany, Chancellor Angela Merkel's conservatives won the most votes in the elections, helping the benchmark DAX index to climb to a new record high of 9,893.81 points. The index ended 1.3 percent higher at 9,892.82, while the euro zone's blue-chip Euro STOXX 50 gained 1.2 percent.
Meanwhile, Japanese shares ended at a 7-week high today, with financials leading the gains, helped by the yen's retreat against the dollar and a record-high for Wall Street on upbeat US housing data.
The benchmark Nikkei extended its winning streak to a third day and rose 1 percent to 14,602.52, its highest closing since April 8.
The broader Topix advanced 1.2 percent to 1,194.69 in lowest trading volume in five weeks, while the new JPX-Nikkei Index 400 added 1.2 percent to 10,897.39.
Activity was light, partly as financial markets in London and New York are closed for public holidays.