EUROPE MARKETS: European Stocks Propelled Higher By Italian Banks, Nestlé

By Sara Sjolin, MarketWatch Features Dow Jones Newswires

Oil rally boosts sentiment too

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European stocks logged broad gains on Monday, lifted by Italian banks after Rome stepped in to shut down two failed lenders, and as Nestlé SA rallied after a hedge fund snapped up a major stake in the consumer-products giant.

The Stoxx Europe 600 index climbed 0.8% to 390.85, setting it on track for its highest close in a week.

Last week, stocks across Europe were put under pressure by a renewed selloff in oil prices, with crude slumping to a 10-month low on Wednesday. However, oil prices rose on Monday (http://www.marketwatch.com/story/oil-prices-up-1-rising-for-third-session-in-a-row-2017-06-26), helping lift energy giants on the European markets.

Shares of Total SA (TOT)(TOT) added 0.6%, Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) rose 0.6%, and Repsol SA (REPYY) put on 0.5%.

Italian bank rescue: The Italian government on Sunday reached a deal to close two struggling lenders (http://www.marketwatch.com/story/italy-may-spend-billions-to-shut-two-failing-banks-2017-06-25) -- Veneto Banca and Banca Popolare di Vicenza -- after the European Central Bank on Friday evening declared that the pair was set to fail. The bill to assume responsibility for liquidating the banks' bad loans and other items could cost the government as much as 17 billion euros ($19 billion).

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The "good" assets of the banks will be transferred to Intesa Sanpaolo SA (ISP.MI) for the token price of EUR1. Intesa will be given EUR5.2 billion to cover expenses related to the transaction, including money to cover job cuts.

Shares of Intesa rose 4.4% on Monday after the news. Among other Italian banks, shares of Unione di Banche Italiane SpA (UBI.MI) added 3.5% and UniCredit SpA (UCG.MI) picked up 3.2%.

Italy's FTSE MIB index rallied 1.5% to 21,153.96.

Other movers: Shares of Nestlé SA (NESN.EB) jumped 3.8%, on track for an all-time closing high. The rally came after news that billionaire activist investor Daniel Loeb's Third Point LLC hedge fund has taken a $3.5 billion stake (http://www.marketwatch.com/story/daniel-loebs-hedge-fund-takes-35b-nestle-stake-2017-06-25) in the Swiss consumer-products stalwart.

Individual indexes: Germany's DAX 30 index climbed 0.8% to 12,839.55, while France's CAC 40 index gained 1.1% to 5,322.60.

The U.K.'s FTSE 100 index traded 0.7% higher (http://www.marketwatch.com/story/ftse-100-breaks-4-day-losing-streak-as-oil-rallies-2017-06-26) at 7,473.36, boosted by the benchmark's oil companies.

The euro was down at $1.1181, compared with $1.1193 late Friday in New York.

Economic news and politics: German business sentiment hit a record in June, with the Ifo business climate index unexpectedly rising to 115.1 points (http://www.marketwatch.com/story/german-business-sentiment-hits-record-in-june-2017-06-26) from 114.6 points in May.

In the U.K., the Democratic Unionist Party was said to have made a deal with the Conservative Party to support Prime Minister Theresa May's minority government (http://www.marketwatch.com/story/uks-dup-reaches-deal-to-support-minority-tory-government-reports-2017-06-26), according to media reports citing unnamed sources.

Read:Brexit one year later: 5 ways the U.K. could now leave the EU (http://www.marketwatch.com/story/brexit-one-year-after-vote-here-are-the-5-possible-scenarios-for-the-eu-divorce-2017-06-20)

(END) Dow Jones Newswires

June 26, 2017 07:19 ET (11:19 GMT)