EUROPE MARKETS: European Stocks Take A Breather After Brexit-fueled Selloff

By Carla Mozee, MarketWatch

Italian banks rise on reports of injection

Stocks in Europe climbed Tuesday, getting a break after two back-to-back selloffs sparked by the U.K.'s Brexit vote.

The Stoxx Europe 600 bounced up 2.5% to 316.41. All sectors were in the green, led by the financial sector .

In that group, Italian bank stocks rose after reports that the Italian government (http://www.telegraph.co.uk/business/2016/06/27/italy-eyes-40bn-bank-rescue-as-first-brexit-domino-falls/) is looking at adding EUR40 billion ($44 billion) to the country's financial system. The country's officials are seeking ways to protect the system in the wake of the U.K.'s vote to leave the European Union last week.

Shares of Unione di Banche Italiane SpA (UBI.MI) drove up 9.6%, Banca Monte dei Paschi di Siena SpA (BMPS.MI) popped up 8.1% -- as did Banca Popolare di Milano (PMI.MI) -- and Intesa Sanpaolo SpA (ISP.MI) picked up 8.2%.

The Stoxx 600 on Monday tumbled 4.1% (http://www.marketwatch.com/story/european-stocks-drop-to-4-month-low-as-brexit-fallout-continues-2016-06-27) to a fourth-month low, a second straight slide after Thursday's Brexit referendum.

In London on Tuesday, the FTSE 100 tacked on 2.2% at 61,115.15, while the midcap FTSE 250 added 2.7% to 15,375.89.

Still, after the "savage two-day Brexit rout," there is "still no obvious reason to buy stocks in a big way, given a lack of clarity over Britain's future relationship with Europe, and this could be an example of short-covering," said Lee Wild, head of equity strategy at Interactive Investor, in a note.

"What is certain is that markets will remain super-volatile for some time, driven by events in Westminster and Brussels," he added, noting that U.K. Prime Minister David Cameron is meeting EU leaders at a two-day summit starting Tuesday.

Global equity markets lost a record $3.01 trillion in the two sessions (http://www.marketwatch.com/story/brexit-just-sparked-the-worst-global-stock-rout-ever-sps-silverblatt-2016-06-27) after the U.K.'s EU referendum, according to Howard Silverblatt, senior index analyst at S&P Global.

Indexes: The gains in Italian banks helped push the FTSE MIB up 4.5% to 15,773.11, while Germany's DAX 30 gained 2.3% to 9,487.13.

France's CAC 40 moved 2.7% higher to 4,092.62, and Spain's IBEX 35 advanced 2.8% to 7,856.30.

The euro was buying $1.1072, up from $1.013 late Monday in New York. Meanwhile, the pound was buying $1.3298 after hitting $1.3197 late Monday in New York, which marked a fresh 31-year low.

(END) Dow Jones Newswires

June 28, 2016 04:54 ET (08:54 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.