Investing.com - Italian bank stocks were some of the best performers in European midday trade on Wednesday, buoyed by reports that Italy may be open to reviewing its draft budget for 2019.
The FTSE Italia All Share Banks index, which sank to two-year lows on Tuesday, was up about 1.6% in Milan by 6:40AM ET (1140GMT).
The index gave up some of its gains after the League party, led by Italian Deputy Prime Minister Matteo Salvini, denied the report.
The European Commission has rejected Rome's expansionary 2019 budget because it reverses a commitment to reduce borrowing made by the previous government.
Intesa Sanpaolo (MI:ISP) and Unicredit (MI:CRDI) tacked on 1.5% and 1% respectively, while Banco BPM, the country's third-largest bank, surged 3.2%.
Smaller lenders UBI Banca SpA (MI:UBI) and Bper Banca SpA (MI:EMII) were also higher, gaining nearly 2% apiece.
The strong gains in Italian banks lifted the broader European financial sector, with the pan-European Stoxx 600 Banks index rising 0.8%.