Italian Lenders Bounce Back After Government Eases Stance on Contingency Tax

European stocks reached a weekly high on Wednesday, supported by energy stocks, as Italian lenders bounced back from sharp losses in the previous session after the government eased its stance on a contingency tax on banks.

Banks in the eurozone rose 1.4% after falling 3.5% a day earlier, as the Italian government announced late on Tuesday a surprise tax cap on creditors in the country.

She explained that the 40% windfall tax would not exceed 0.1% of their total assets, Reuters reported.

China Slips Into Recession, European Stoxx 600 Rises

The European Stoxx 600 rose 0.4% as data showed China slipped into recession, which also increased risk appetite.

The oil and gas index rose 2.3%, its best daily performance in two months, as oil prices reached their highest level since April.

Attention will shift to US inflation data due Thursday as investors wait to see if the US central bank will raise interest rates this year.