European stock markets surged on Tuesday, hovering around an 11-month high as Italian bank shares strengthened after the country’s largest lender, UniCredit SpA, rolled out a restructuring scheme.
The Stoxx Europe 600 index added 0.6% to 355.83, on track to notch its highest settlement since early January. The index on Monday lost 0.5%, breaking a five-session winning run that had pushed shares to their best levels since the start of the year.
The best performing national index was Italy’s FTSE MIB, which popped up 1.5% to 18,643.95. Italian bank shares leapt 2.9%, with UniCredit charging up 7% as the lender said it plans to cut an additional 6,500 jobs by 2019, sell shares and a large chunk of bad debt as part of an overhaul.
UniCredit will launch a 13 billion-euro ($13.8 billion) rights issue by the end of March. Italy’s largest bank by assets has a market capitalization of just under €15 billion.
“The upfront bill of €13 billion is clearly large, but as we have highlighted previously, we think an aggressive balance sheet clean-up paves the way for a more substantial re-rating,” said analysts at Jefferies in an early Tuesday note.
Movers: Meanwhile, shares of Mediaset SpA soared 25% to top the Stoxx 600 after France’s Vivendi SA on Monday disclosed a 3% stake in the Italian broadcaster. Vivendi plans to continue buying shares, to build a stake of up to 20% in the company. Vivendi’s stock was down 0.4%.
Anheuser-Busch InBev shares rose 1.4% after Japan’s Asahi Group Holdings Ltd. said it’s buying five Eastern European beer brands from AB InBev for €7.3 billion ($7.8 billion).
Assa Abloy SA shares gained 2.7% after Barclays raised its rating on the Swedish lock maker to overweight from equalweight.
Andritz AG shares fell 3.1% after UBS downgraded the Austrian engineering group to neutral from buy. “The shares have traded up to the high end of their trading range over the past 12 months or so, absent a clear catalyst. We see no clear positive catalyst coming up any time soon either,” said UBS analyst Sven Weier in a research note.
Unilever PLC shares put on 1% following an upgrade of the Dove soap maker to buy from hold at Jefferies.
Other indexes: Germany’s DAX 30 index advanced 0.7% to 11,262.81, while France’s CAC 40 index gained 0.6% to 4,790.89
The U.K.’s FTSE 100 index tacked on 0.2% to 6,904.09, as shares of miners weighed.