European stocks hold gains on Italy boost; Dax up 0.23%

Investing.com - European stocks remained higher on Monday, as Italy's new government prepared to announce a fresh economic plan, while expectations for a rate cut by the European Central Bank continued to support.

During European afternoon trade, the EURO STOXX 50 gained 0.39%, France’s CAC 40 advanced 0.60%, while Germany’s DAX 30 rose 0.23%.

European equities were boosted after a new Italian government was formed over the weekend, putting an end to two months of political deadlock.

Italy's new economy minister, Fabrizio Saccomanni, was expected to present his economic plan to parliament later Monday. He said in interview on Sunday that he plans to cut taxes and public spending and lower borrowing costs.

Separately, investors eyed an upcoming ECB policy meeting later in the week, amid speculation over an interest rate cut after weak German economic data last week.

Financial stocks remained broadly higher, as shares in French lenders BNP Paribas and Societe Generale advanced 0.75% and 0.86%, while Germany's Deutsche Bank rjumped 1.42%.

Peripheral lenders added to gains, with Spanish banks BBVA and Banco Santander rallying 1.39% and 1.48% respectively, while Italy's Unicredit and Intesa Sanpaolo surged 1.84% and 2.36%.

It was announced earlier that Javier Marin will replace Alfredo Saenz as Santander CEO.

On the downside, Bayer plummeted 2.51% after the German chemical and pharmaceutical company said it will buy Conceptus, the maker of Essure permanent birth-control device, for USD31 a share.

In London, commodity-heavy FTSE 100 edged down 0.09%, but remained supported by gains in the financial sector.

Shares in the Royal Bank of Scotland inched up 0.05% and Lloyds Banking jumped 0.93%, while Barclays and HSBC Holdings slipped 0.21% and 0.27% respectively.

In addition, Scottish fund manager Aberdeen soared 9.03%, extending earlier gains, after reporting first-half adjusted pretax profit of GBP222.8 million, beating the average analyst projection of GBP211 million.

Meanwhile, mining stocks turned mixed, as BHP Billiton retreated 0.56% and Rio Tinto added 0.19%, while copper producer Xstrata tumbled 0.98% and rival Kazakhmys edged up 0.17%.

Elsewhere, Balfour Beatty dove 12.50% after the construction company said 2013 operating profit will be GBP50 million less than it had projected earlier.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.28% rise, S&P 500 futures signaled a 0.28% gain, while the Nasdaq 100 futures indicated a 0.37% increase.

Also Monday, a report by the European Commission showed that its euro zone economic sentiment index deteriorated to 88.6 in April from 90.1 in March.

Later in the day, the U.S. was to release a report on pending home sales.