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Milan stocks end week on a strong note as banks take the lead

by Andrea Fontana

European shares closed broadly higher as investors digested a report showing the US economy adding 227,000 jobs in January and the unemployment rate rising marginally to 4.8%. Banking shares were mostly higher, helping lift the region's stock markets, amid expectation that US President Donald Trump will loosen regulations on the country's financial industry and after the Bank of Japan's bond-buying operations and China's central bank raised short-term interest rates to help deflate asset bubbles and reduce long-term financial risks.

On the macroeconomic front, Italy's purchasing managers' index for the services sector in January inched up to 52.4 from 52.3 the earlier month, according to data released by global information provider IHS Markit. On a negative note, the differential between yields on 10-year Italian government bonds and their German counterparts rose to 1.83 percentage points, three points higher from the close on Thursday.

The London FTSE 100 closed up 0.67% at 7,188.30 points, the Frankfurt DAX gained 0.20% at 11,651.49 points, the Paris CAC 40 ended up 0.65% at 4,825.42 points, in Milan the FTSE MIB rose 1.20% at 19,116.04 points and in Madrid the IBEX 35 climbed 0.72% at 9,473.80 points.

Among blue chips, shares of Italian lender Intesa Sanpaolo rose 2.66% after the bank denied speculation it was preparing an all-share offer to acquire insurer Generali.

In a statement however, the bank seemed to be keeping its options open.

“With reference to recent news in the press in relation to an upcoming launch of a Public Exchange Offer concerning Assicurazioni Generali, which include presumed relevant conditions, Intesa Sanpaolo - as already stated by a spokesman from the bank yesterday afternoon - reiterates the contents of its press release of 24 January 2017,” the bank said in a statement. “Intesa Sanpaolo confirms, therefore, that possible industrial combinations with Assicurazioni Generali continue to be only the subject of a case study, which is part of the various analyses that the bank's management regularly carries out about the group's options for growth, both internal and external.

After market close, Intesa Sanpaolo said that it posted a net profit of €776 million in the fourth quarter, up from €13 million a year earlier, lifting the full year bottom line 13.6% to €3.111 billion. The group said that it plans to pay €3 billion in dividend for the full year.

Rival lender UniCredit ended the session unchanged after it said that it will pay about €500 million in fees for its €13 billion capital increase starting Monday and ending February 24. The net proceeds of the rights issue will be €12.5 billion, it added.

Finally drinks company Campari gained 1.43% as analysts welcomed the news of the acquisition of Bulldog London Dry Gin. Campari said late Thursday that is acquiring Bulldog London Dry Gin for $55 million plus working capital and assumed liabilities of $3.4 million. The Italian group has been distributing Bulldog gin since 2014.