Europe midday: Stocks hold onto early gains, Italy open to talks with EU
Stocks are holding onto most of their gains, boosted by ratings agency Moody's decision last Friday not to keep its outlook on Italy's sovereign debt at 'negative', pushing back the risk that a downgrade into 'junk' might be lurking just around the corner.
Also helping investor sentiment a tad, on Monday morning Italian economy minister, Giovanni Tria, and the country's Premier, Giuseppe Conte, said Rome was open to dialogue with Brussels, with the latter holding out the possibility that Italy might be willing to revise down its public deficit target for 2019 down from 2.4%-worth of GDP.
Speaking on Monday morning, Conte said: "we are willing to get around a table to continue dialogue with the European Commission.
"If it is rejected (by the Commission), we will sit at a table and assess things together."
As of 1220 BST, the benchmark Stoxx 600 was up by 0.56% or 1.99 points at 363.23, alongside an advance of 0.71% or 132.79 points to 19,213.14 for Milan's FTSE Mibtel.
Germany's Dax meanwhile was ahead by 0.75% or 87.16 points at 11,641.18.
Meanwhile, the yield on the benchmark 10-year Italian Treasury note was down by six basis points at 3.42%, having hit an intra-day low, earlier during the session, at 3.30%. That was on top of a 20 basis point drop last Friday.
On 19 October, debt rating agency Moody's cut its rating on Italy's long-term debt by one notch to Baa3, but raised the outlook for the same from 'negative' to 'stable'.
Moody's said that Rome's new deficit targets meant there were risks that its debt pile might rise further still and drew attention to the freeze on plans for structural reforms.
Nevertheless, the country retained "important credit strengths", Moody's said, including households' "high wealth levels, an important buffer against future shocks and also a potentially substantial source of funding for the government."
Also boosting sentiment, overnight shares on the Shanghai Stock Exchange's Composite Index jumped by 4.09% or 104.1 points to 2,65.88 - its biggest one-day gain for three years - after authorities promised tax cuts.
On a similar note, despite the skepticism of many market watchers, on Saturday the US President claimed his party had been working on "a very major tax cut" for middle-income people which would be unviled over the coming weeks.
In corporate news, shares in Royal Philips tumbled after the health technology firm posted a 7% rise in third quarter operating profits to €568m, falling short of analysts' estimates.
Going the other way, stock in carmaker Fiat snapped higher after unveiling a deal to sell autoparts manufacturer, Magneti Marelli, to KKR&Co's Calsonic Kansei for €6.2bn.
Salvatore Ferragamo shares were also wanted after the widow of the luxury shoemaker's founder, Wanda Ferragamo, passed away at the weekend, prompting speculation of a possible take-over.