(Bloomberg) -- After a tepid week marked by thin trading ahead of the Italian referendum, European equities shrugged off the outcome to climb the most in more than two weeks. The Stoxx Europe 600 Index rose 0.6 percent, led by a rally in carmakers and miners. Milan’s FTSE MIB Index lost 0.2 percent, after swinging between gains and losses as Prime Minister Matteo Renzi announced his resignation.
“A ‘no’ vote was already priced in, and the bottom line is this wasn’t a major risk event for market -- it wasn’t a vote on EU membership, ” said Sylvain Loganadin, a market analyst at FXCM in Paris. “Now that this is behind us, people are buying the dip, betting on a catch-up rally in Europe.”
It has been a painful year for Italian stocks, beleaguered by political uncertainties and a simmering banking crisis. The FTSE MIB has tumbled 20 percent this year, the most among developed market benchmarks.
- Stoxx 600 auto-related shares capped their biggest advance in four months, with Fiat Chrysler Automobiles NV and Renault SA up at least 2.7 percent.
- Stephane Ekolo, chief European strategist at Market Securities, sees a good opportunity in “cheap” Italian shares. “With the uncertainty surrounding the resignation of Renzi, one might be tempted to sell the Italian market, but we think after being down so much, this uncertainty represents a good opportunity to buy some shares on the dips,” he said by phone.
- The VStoxx Index of euro-area equity swings tumbled the most since August 2015, after surging to its highest level since 2012 relative to moves in the Euro Stoxx 50 Index.
- The FTSE MIB fell as much as 2.1 percent, before bouncing off key support levels representing the index’s 50-day and 100-day moving averages
- The euro fell as much as 1.5 percent against the dollar, before reversing losses.