(MENAFN- AFP) European stock markets rallied on Wednesday as traders looked ahead to an ECB policy meeting as concerns over Italy's political future ease.
London, Frankfurt, Paris and Milan markets were up between 0.9 and 1.5 percent around midday compared with Tuesday's close.
Shares in crisis-hit Italian bank BMPS shot higher by almost eight percent on reports that Italy's government is preparing a plan of action should the lender's own rescue efforts fail.
Analysts were looking to Thursday's meeting of the European Central Bank.
"The calm market reaction to Italy's NO vote in last weekend's referendum should ease the pressure on the ECB," said City Index research director Kathleen Brooks.
"It is likely that the ECB will deliver on the markets' expectations, and extend its QE (stimulus) programme."
The euro was steady against the dollar, as the ECB was expected to offer further support to a still-fragile eurozone recovery, analysts said, against a background of uncertainty over US President-elect Donald Trump, Brexit and political risks in Europe.
Italians' rejection of constitutional reforms in Sunday's referendum did not roil markets as some observers had feared, but means that worries over one of Europe's weak spots will be prolonged -- and will likely push the ECB to maintain its mass bond-buying programme.
Italian Prime Minister Matteo Renzi formally resigned Monday and the departure of the centre-left premier casts a shadow over the future of the eurozone's third-largest economy.
But markets appear less worried, with share prices of Italy's troubled banks surging on Tuesday.
Elsewhere Wednesday, Asian markets extended gains after another record close on Wall Street, with Japan's SoftBank surging after Donald Trump said the telecoms giant had agreed to invest $50 billion in the US.
Sydney was up almost one percent by the close despite figures showing its economy contracted in the third quarter.
Hong Kong ended up 0.6 percent, while Tokyo closed 0.7 percent higher and Shanghai also increased 0.7 percent.
Tokyo-listed SoftBank soared 6.2 percent to 7,387 yen, with investors hailing news that the company had agreed to invest a huge sum in business and job creation in the United States.
Trump made the announcement about the deal -- which he said would bring 50,000 jobs -- in the lobby of Trump Tower in New York, alongside SoftBank's flamboyant CEO Masayoshi Son.
Later in the day Taiwan tech giant Foxconn confirmed it is in "preliminary discussions" as part of the investment deal.
Also in view for traders is the Federal Reserve's policy meeting next week, with the US central bank widely tipped to lift interest rates.
Its statement will also be pored over for clues about future policy in light of an expected surge in government spending by Trump which would likely fan inflation.
- Key figures around 1130 GMT -
London - FTSE 100: UP 1.5 percent at 6,880.56 points
Frankfurt - DAX 30: UP 1.5 percent at 10,936.27
Paris - CAC 40: UP 0.9 percent at 4,674.50
Milan - FTSE MIB: UP 1.2 percent at 17,968.69
EURO STOXX 50: UP 1.0 percent at 3,133.67
Tokyo - Nikkei 225: UP 0.7 percent at 18,496.69 (close)
Hong Kong - Hang Seng: UP 0.6 percent at 22,800.92 (close)
Shanghai - Composite: UP 0.7 percent at 3,222.24 (close)
New York - Dow: UP 0.2 percent at 19,251.78 (close)
Euro/dollar: UP at $1.0721 from $1.0718 Tuesday
Dollar/yen: UP at 114.06 yen from 114.03 yen
Pound/dollar: DOWN at $1.2601 from $1.2678
Oil - West Texas Intermediate: UP four cents at $50.96 per barrel
Oil - Brent North Sea: UP four cents at $53.97
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