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* STOXX Europe 600 index up 0.3 pct
* Energy stocks track firmer oil prices
* Italian equities outperform led by banks
* UK bank RBS slumps after failing stress test
By Danilo Masoni and Atul Prakash
MILAN/LONDON, Nov 30 European shares hit a
three-week high on Wednesday, ending the month in positive
territory, with energy stocks racing higher as oil prices
jumped after a deal to curb global oversupply.
The European oil and gas index rose 3.4 percent, its
best day since end-September, after oil prices rose more than 8
percent as some of the world's largest oil producers agreed to
curb oil output for the first time since 2008 in a bid to
support prices. OPEC agreed to cut production to 32.5 million
barrels per day, Kuwait's oil minister said.
"OPEC has confounded the naysayers and critics with an
output freeze... There are a few doubts, but on the whole OPEC
should be pleased with a job well done at long last. This is
likely to keep crude closer to $50 than $40 for now," said Neil
Wilson, market analyst at ETX Capital.
Energy companies helped the pan-European STOXX 600
rise 0.3 percent. The index rose as much as 0.7 percent to its
highest since Nov. 10 when global markets were boosted by
optimism over freshly elected U.S. president Donald Trump's
fiscal stimulus plans.
However, shares in state-backed British bank RBS
fell 1.4 percent after it failed the Bank of England's stress
test of seven British lenders and was told to boost its capital
"RBS is still the weak link in the UK banking chain, almost
a decade after the financial crisis came close to wiping the
bank out," said Hargreaves Lansdown senior analyst Laith Khalaf.
"... Unlike most of its peers, RBS doesn't have the luxury of a
dividend it can cut to support its capital position."
December is set to be an uncharacteristically busy month for
markets, with a referendum on constitutional reform in Italy on
Sunday, followed by a UK Supreme Court ruling on whether the
government can quit the European Union without an act of
The Italian bank index surged for a second day,
up 3 percent, after touching a two month low as some investors
said the sell-off seen in the run up to the vote that could
unseat Prime Minister Matteo Renzi might be overdone.
The bank rally helped Milan's blue chip index,the
worst performer among major European bourses this year, end up
"Looking at where Italy is trading today, the level of short
interest and the surge of interest in the referendum outcomes,
one wonders whether much may already be in the price," Liontrust
fund manager Olly Russ said.
Bets on falls in Italian stocks and demand for insurance
against sovereign default have both picked up markedly this year
on growing investor concern ahead of the referendum, data
company HIS Markit said.
However, Jefferies is sticking with a contrarian bullish
call on Italian stocks, echoing views from some other fund
managers who believe that the expected failure of Renzi's
constitutional referendum will offer buying opportunities as
The broader European equities market was also underpinned by
some M&A news.
Linde shares advanced 4.7 percent after the German
industrial gases group received a fresh approach from U.S. rival
Praxair for a merger of equals.
Elsewhere, British packaging company RPC Group hit a
record high and ended up 7.5 percent after reporting a 53
percent rise in first-half revenue.
(Reporting by Danilo Masoni; editing by Ralph Boulton)