EUROPEAN markets pushed ahead on Monday, brushing aside concerns that the Eurozone may be hit by a fresh bout of economic uncertainty triggered by the "no" vote in the Italian referendum.
The FTSE 100 Index closed 16.11 points higher at 6746.83, with a strong performance from mining stocks pulling the top-flight back into the black after losses over two straight sessions.
But the London market failed to match the gains clocked by Germany's Dax and the Cac 40 in France, which rose 1.6 per cent and one per cent respectively in response to the defeat of far-right candidate Norbert Hofer in the Austrian presidential elections.
Milan's FTSE MIB was registering some distress over Italy's referendum vote on constitutional reforms, closing down 36.64 points at 17050.21.
A "yes" vote would have handed powers back to Italy's regions, making the parliament's lower house - the chamber of deputies - more powerful than the senate.
But the crushing defeat for the Italian government forced Prime Minister Matteo Renzi to resign and put the country's battered banking sector firmly in the spotlight.
Analysts are fearful that Italian banks, many of which are burdened by bad debt, may now struggle to find refinancing during an ensuing period of political uncertainty.
Jane Foley, a senior FX strategist at Rabobank, said: "For Italy's banks the referendum result will mark a huge disappointment.
"A decision will be forthcoming as to whether the five billion euro (£4.18 billion) recapitalisation of Monte dei Paschi will go ahead. If a private recapitalisation were to fail, it is likely that the government will step in to prevent the spread of contagion."
Italian banks were in the doldrums, with UniCredit falling three per cent, Intesa Sanpaolo dropping one per cent, Banco Popolare down seven per cent, and Banca Monte dei Paschi di Siena four per cent lower.
On the currency markets, the pound hit a four-and-a-half-month high against the euro following the result of the Italian referendum result.
However, an afternoon resurgence from the euro put the pound under pressure, with sterling down 0.8 per cent versus the euro at 1.184.
The pound was also struggling against the US dollar, dropping 0.3 per cent at 1.27.
It came despite a positive update for the UK economy, with activity in Britain's powerhouse services sector jumping to a 10-month high in November.
The price of oil reached a 16-month high, rising one per cent to $55 a barrel, following last week's landmark deal to cut supply.
The Organisation of the Petroleum Exporting Countries (Opec) defied the naysayers on Wednesday to agree its first production cut since 2008 in an effort to support prices.
In UK stocks, a surge in copper prices boosted the mining giants, with Antofagasta finishing at the top of the biggest risers, up four per cent or 34p to 727.5p.
Shares in Royal Bank of Scotland (RBS) rose 4.4p to 197.8p after the bank announced it had reached a "final settlement" with three out of the five shareholder groups bringing compensation claims against it in connection with its 2008 rights issue.
The biggest risers on the FTSE 100 Index were Antofagasta up 34p to 727.5p, Glencore up 12.4p to 290.3p, Carnival up 132p to 4,039p, Anglo American up 34p to 1,243p.
The biggest fallers on the FTSE 100 Index were Fresnillo down 48p to 1,150p, Randgold Resources down 185p to 5,640p, United Utilities down 24p to 858.5p, Severn Trent down 53p to 2,074p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here