European stocks are continuing to move higher, save in Italy, where traders are still assessing the unexpected results from the country's parliamentart elections which appear to indicate the country's main anti-establishment parties came away with half of the votes.
Italy's government stepped in at the weekend to liquidate two ailing lenders from the northern region of Veneto in a controversial bid to avoid a bank run.
Stocks began the morning lower amid dour sentiment after the White House pulled its proposed bill on healthcare reform last Friday, raising concerns that other legislative initiatives on tax reform and infrastructure investment might encounter similar resistance.
European stocks were higher on Monday, with Italian stocks leading the way, as investors reacted to promises of greater defence and infrastructure spending from the US president and apparently shrugged off news that the ruling party in Rome had split.
Intesa Sanpaolo reported a smaller than expected decline in second quarter profits, as asset sales boosted the bank´s bottom line.
Italy's financial industry has approved a plan to create a 5bn (£4bn) rescue fund for struggling banks.
The recent 'sell-off' in the banking sector had been overdone, with high-yield spreads pricing in about a 70% possibility of a recession, which was too much, Credit Suisse said in a research report sent to clients.
The European Commission and Italian authorities reached a deal on Wednesday which it is hoped will help restore the flow of credit to the country´s businesses.
The ongoing weakness in emerging markets and China won't significantly dent the European economy, Morgan Stanley said in its most recent equity strategy note.
European Banks are undervalued as their risk profile and cost of equity have fallen sharply, one of the world's largest brokers said on Thursday.
Credit Suisse published it latest list of top European investment ideas on Tuesday. Here's a pick of one from each sector.
Europe's biggest banks are coming under intense pressure from European regulators, as concerns about Europe's financial situation continue to grow.
Clive Cowdery, whose Resolution acquisition vehicle bought Friends Provident in 2009, will make about £160m from Aviva's takeover of Friends Life, the Sunday Times said. The roles of chairman, chief executive and finance director at the combined company will go to the Aviva incumbents, according to the Sunday Telegraph. Aviva is trying to persuade its own shareholders about the wisdom of the deal, the Mail on Sunday said.
As markets prepare for the official results of the European Central Bank (ECB) stress tests and asset quality review on Sunday, a report stated that 11 Eurozone banks would fail similar tests by the European Banking Authority (EBA) .
Italian bank shares were on the move on Tuesday after the nation's two largest financial institutions, UniCredit and Intesa Sanpaolo, announced a deal to unload some of their bad loans.
Intesa Sanpaolo may forge ahead of Italian peers and be the first lender to set up an internal "bad bank" by setting aside non-performing assets before it comes under fire in the bank stress tests that will be carried out on European financial institutions this year.