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* STOXX Europe 600 index up 0.9 pct
* Banks advance on Fed's move, hints at more
* Precious metals miners among top fallers
By Atul Prakash and Danilo Masoni
LONDON/MILAN, Dec 15 European shares rose on
Thursday, helped by gains in global banks after the Federal
Reserve raised U.S. interest rates, while growing corporate deal
activity underpinned year-end optimism.
The pan-European STOXX 600 index rose 0.9 percent,
ending at its highest level since Jan. 5. It is still down
nearly 2 percent so far in 2016 but could close the year in
positive territory if it sees an end-of-year rally.
The European banking index surged 2.5 percent, also
ending at an 11-month high. Deutsche Bank, BNP
Paribas, HSBC, Santander and Credit
Suisse rose 1.5 to 5.3 percent after the Fed's move.
Banks benefited from gains by short-dated U.S. treasury
yields, which touched their highest in more than seven years,
after the Fed raised interest rates for the first time in a year
and hinted at more in 2017.
Higher yields are a boon to banks' profitability.
"We think that the Fed will continue to be very gradual in
its rate hikes and we look for maybe two to three rate hikes in
2017, depending on how growth comes out next year," said Bob
Baur, chief global economist at Principal Global Investors.
"We expect to see higher stock prices, faster nominal
growth, mildly higher interest rates and just a bit more
Also helping financials, Italian banks rose 4.4
percent and were on course for a third straight week of gains.
Italian banks have staged a rebound since Paolo Gentiloni
was appointed prime minister, on expectations that a stable
political environment will help ailing banks to recapitalize.
Gentiloni has won the backing of the fragmented Senate, allowing
his government to formally take office.
Sources said the Italian government was ready to pump 15
billion euros ($15.58 billion) in Monte dei Paschi di Siena
and other ailing banks.
Spain's Grifols rose 6.7 percent, the top gainer
in the STOXX 600 index, after saying it would buy U.S.
Hologic Inc's assets in their blood-screening joint
venture and refinance its net debt in the first quarter of next
But French utility EDF fell 12.7 percent, wiping
about 2.5 billion euros from its market value, after warning of
lower earnings in 2017. The stock, which made its biggest
one-day fall ever, led declines in the STOXX 600 index.
Mining shares, the year's best performers in Europe, also
lost ground, with the sector index falling 2.3 percent
on a firmer dollar following the Fed's move. A stronger dollar
generally makes commodities costlier for other currency holders.
Precious metals miners were among the hardest hit as gold
dropped to its lowest in more than 10 months. Shares in
Fresnillo, Randgold Resources, Acacia Mining
and Centamin slumped 5.6 to 11.9 percent.
($1 = 0.9628 euros)
(Editing by Larry King)