17.10 (close): Hopes that Italy may take a controlling stake in troubled banking giant Monte dei Paschi di Siena helped the London market record its biggest rise since Donald Trump’s shock US presidential victory.
The FTSE 100 Index closed up 122.39 points to 6,902.23, as British banking shares soared following speculation that Italy would buy up a two billion euro (£1.7billion) slice of the world’s oldest lender.
Possible government intervention comes after private investors became cautious about ploughing funds into Monte dei Paschi during a period of acute political uncertainty.
Prime minister Matteo Renzi was scheduled to resign at 7pm on Wednesday after a bruising defeat for the Italian government in the country’s referendum on constitutional reforms.
Monte dei Paschi has been looking to haul in five billion euros (£4.2billion) from private investors to…