European stock markets rallied on Wednesday in reaction to successful Italian bond auction. In the latest auction the Italian Treasury managed to sell six month bills at an average yield of 3.25 percent as compared to 6.5 percent in its last auction. The treasuries also saw high demand totally 9 billion euros for the day equivalent to $11.8 billion.

The auction also impacted the yields of 10-year government bonds as the yield on Italian bonds declined 15 basis points to 6.73 percent while yields on Spain’s 10-year bond fell 24 basis points to 5.06 percent. The Italian FTSE MIB Italy index gained 1.2 percent after the news to 15,102.31 with Telecom Italia SA and Intesa Sanpaolo SpA as top performers reporting the gains of 2 percent and 2.7 percent respectively.

The Stoxx Europe 600 index gained 0.5 percent to 243.07 on Wednesday; however the trading activity remained low due to Christmas and New Year’s holidays.  France’s CAC-40 index surged 0.6 percent to close at 3,120.49 with major contribution from healthcare and financial sector. Sanofi SA gained 1.7 percent. BNP Paribas SA and AXA SA were also among the top gainers reporting the gains of 1.3 percent and 1.1 percent respectively.

Germany’s DAX 30 index remained unchanged at 5,866.74. Among the major losers included Deutsche Bank AG which fell 2 percent while Commerzbank AG declined 1.6 percent. BMW AG fell 1.2 percent while Volkswagen AG slipped 1 percent for the day.

London’s FTSE 100 index surged 0.6 percent to close at 5,542.95. Among the performers at London Stock Exchange included, Tesco PLC gaining 2.2 percent, British American Tobacco PLC jumping 2 percent, GlaxoSmithKline PLC rising 1 percent while Standard Chartered PLC soared 1.7 percent for the day.