Italian stocks mark best day in 13 months as political angst ebbs; European shares rise Europe Markets

Bundesregierung via Reuters

German Chancellor Angela Merkel speaks to U.S. President Donald Trump during the second day of the G-7 meeting.

European stocks finished with a win Monday, as Italian stocks posted their best session in more than a year, and as investors pushed past this weekend’s acrimonious Group of Seven meeting in Canada.

Italy’s benchmark surged after the country’s new finance minister offered reassuring comments about the eurozone.

Investors are watching for news from Singapore, where U.S. President Trump is scheduled to meet North Korean leader Kim Jong Un in a historic summit.

How markets performed

Italian stocks fared the best in Monday’s session, with the FTSE MIB index /zigman2/quotes/210598024/delayed IT:I945 +0.34% leaping by 3.4%. That is the strongest percentage rise since April 24, 2017, according to FactSet data. The index closed at 22,086.20, the highest close since June 1.

Investors also snapped up Italian debt, driving down the yield on Italy’s 2-year note /zigman2/quotes/211347219/realtime BX:TMBMKIT-02Y 0.00% by 53 basis points to 1.06%, according to Tradeweb. Yields fall when bond prices rise. The yield on 10-year bond /zigman2/quotes/211347230/realtime BX:TMBMKIT-10Y 0.00% fell 28 basis points to 2.82%.

The broader Stoxx Europe 600 Index /zigman2/quotes/210599654/delayed XX:SXXP +0.66% finished 0.7% higher at 387.94, the first rise in five sessions. All sectors rose, led by the financial and telecommunications groups. On Friday, the index fell 0.2% and ended last week lower by 0.5%.

Germany’s DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX +0.69% closed Monday’s session up 0.6% at 12,842.91, and France’s CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 +0.81% rose 0.4% to 5,473.91.

In London, the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.15% added 0.7% to end at 7,737.43, aided by a drop in the pound.

The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.2767% moved up to $1.1794 from $1.1771 late Friday in New York.

What drove markets

Italian stocks and bond prices leapt as Italian Economy Minister Giovanni Tria said the country’s new government is committed to the euro, according to an interview with Italian newspaper Corriere Della Serra published Sunday. That appeared to allay fears that Italy’s new antiestablishment coalition government—led by the 5 Star and the League parties—would ditch the shared currency.

“The position of the government is clear and unanimous. There is no discussion about leaving the euro. The government is determined to prevent any emergence of market conditions that would lead to leaving the euro,” Tria said, according to a translated version of the interview on the newspaper’s website.

Tria also confirmed the government’s goal of decreasing Italy’s debt this year and in 2019, which helped lift Italian bank stocks. Public debt in the eurozone’s third-largest economy exceeds 130% of gross domestic product.

Investors appeared to brush off this weekend’s G-7 meeting in Quebec, where the U.S.’s relationship with its long-running allies continued to deteriorate. Trump withdrew his support for the group’s communiqué after Canadian Prime Minister Justin Trudeau repeated his criticism of U.S. tariffs on Canadian metals.

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