MILAN: European shares hit a three-week high on Tuesday as hopes of a possible trade deal between China and US offset worries over global growth and Italian banks rose after Rome moved in support of troubled lender Carige.The pan-European STOXX 600 benchmark rose 0.6 per cent by 0832 GMT, while euro zone stocks and UK's top share index FTSE both rose 0.5 per cent.Italian banks rose 0.9 per cent, also hitting a three-week high and outperforming gains in their European peers.
The Italian government approved late on Monday a decree aimed at shoring up bank, offering it access to a series of state-support options including recapitalisation.Shares in Carige were not trading, having been suspended last week by market regulator Consob, while shares in country's top lenders Intesa Sanpaolo and UniCredit were up around 1 per cent.Strength among retailers also propped up market.Their sectoral index rose 1.4 per cent, as gains in France's Carrefour, up more than 3 per cent following a Bank of America Merrill Lynch upgrade to buy, helped more than offset a disappointing update from UK's Morrison.Shares in Britain's fourth-largest supermarket group fell 2.6 per cent after it missed Christmas sales forecasts as weak consumer demand hit its retail and wholesale businesses.Elsewhere, Signify fell 6.8 per cent to bottom of STOXX 600 after a downgrade to neutral from Bank of America Merrill Lynch, while Rotork was top gainer on index, up 6.1 per cent after it was upgraded by same broker.