London shares surge on rescue hope for troubled Italian bank
London's top-flight index was enjoying a heady rise on Wednesday amid reports that Italy may take a controlling stake in troubled banking giant Monte dei Paschi di Siena.
The FTSE 100 Index was up 103.76 points to 6,884.06, rallying for the third session on the bounce, amid speculation that Italy would buy up a 2 billion euro (£1.7 billion) slice of the world's oldest bank to counter fading hopes of a privately-funded rescue.
Investors have become wary about ploughing funds into the lender during a period of acute political uncertainty following the resignation of Italian Prime Minister Matteo Renzi after the "no" vote in the country's referendum on constitutional reforms.
Monte dei Paschi has been looking to haul in 5 billion euros (£4.2 billion) from private investors to shore up its battered balance sheet and prevent a collapse which would deal a hefty blow to the European banking sector.
Shares in Royal Bank of Scotland were up 8.7p to 217.8p, while Standard Chartered rose 26p to 683p and Barclays climbed 7.5p to 234.3p.
Across Europe, Germany's Dax was 1.5% ahead and the Cac 4 in France pushed 0.9% higher.
On the currency markets, the pound sank further against the greenback after UK manufacturing and industrial production recorded surprise falls.
Figures from the Office for National Statistics (ONS) showed manufacturing output fell 0.9% in October, down from a 0.6% rise in September, with economists eyeing 0.2% growth.
Industrial production also plunged below expectations, recording its largest monthly drop in four years, declining 1.3% in October.
It caused the pound to sag 0.7% against the US dollar to 1.259, while sterling was also 0.7% lower versus the euro at 1.174.
The UK currency had initially slipped after Prime Minister Theresa May said she would commit to publishing a plan for Brexit before triggering Article 50 in March next year.
The price of oil was edging higher after previously sliding on fears that Opec's landmark deal to support prices might turn out to be a damp squib.
Brent crude was up 0.1% to 53.99 US dollars a barrel, as investors regained some confidence that the cartel could achieve its hopes of cutting production by around 1.2 million barrels a day to a total production of 32.5 million barrels a day from the start of next year.
In UK stocks, t rain and bus operator Stagecoach was 2% ahead on the second tier after handing confidence to investors that it could hit its full-year targets despite seeing profits slip.
The FTSE 250 firm said slowing economic growth, the Brexit vote and terrorism have begun to take their toll on the company's UK rail division.
Half-year pre-tax profits fell 1.4% to £89.5 million, while revenue nudged up 1.6% to £2 billion over the period.
Shares were up 4.1p to 209.8p.