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European stocks end slightly higher on optimism over Italy

February 17, 2014

European shares ended mostly higher on Monday, extending Friday`s gains amid optimism prime-minister-designate Matteo Renzi will be able to form a government to push on economic reform. The stocks trade was limited apparently, with US markets shut for the President`s Day. But sentiment was a little bit upbeat forcing Italy`s 10-year yield to an eight-year low as Democratic Party Leader was chosen to form a government. At the close indices were somehow mixed, but gains were slightly more evident, boosted by rallies in telecommunications shares. -  Stoxx   600  advanced 0.37% or 1.24 points to  334.56 -  Stoxx 50  advanced 0.36% or 10.51 points to  2,939.63 Italian President Giorgio Napolitano on Monday asked Matteo Renzi, 39-year-old, to from the country`s new government, making him the youngest prime minister ever. Matteo Renzi get go-ahead to from government Three days after Enrico Letta resigned as prime minister, Mr. Renzi got the green light to form a new government within 24 hours, where he is expected to propose a program of reforms to be completed over the next few months. But his journey towards premiership will be hectic apparently, as he seeks to pull a political maneuver that most people in Italy did not approve of. The mayor of Florance, who said Thursday that it was time for a "radical change" in economically stagnant Italy, met for more than an hour with Napolitano on Monday morning, after which the President`s administration said in a statement that he`s been asked to form a government. This means Renzi will have to strike a deal with a small New Centre Right (NCV) party to secure a majority and to name his cabinet before seeking a formal vote of confidence in parliament, probably later this week. Ex-premier Letta handed his resignation on Friday after his Democratic Party withdrew its support for him during a leadership meeting. Stocks on the Italian FTSE MIB Index extended Friday's gains, where: - Italy`s  FTSE MIB  rose 0.18% or 37.26 points to  20,459.65 - Britain`s  FTSE 100  rose 1.01% or 67.35 points to  6,730.97 - France`s  CAC 40  fell 0.11% or 4.78 points to  4,335.36 - Germany`s  DAX 30  fell 0.01% or 1.11 points to  9,661.29

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Source: Financial Markets

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