By Shreyashi Sanyal
(Reuters) - European shares rose on Wednesday as focus remained on a busy day of earnings, with Italian shares outperforming after President Sergio Mattarella looked set to ask former European Central Bank chief Mario Draghi to form a government.
Milan's FTSE MIB index jumped 2.2%, while Italy's 10-year bond yield tumbled to its lowest in two weeks as Mattarella summoned Draghi for talks at 1100 GMT after hearing that efforts to salvage the collapsed coalition of Prime Minister Giuseppe Conte had failed.
"The reports that Mario Draghi has been asked to try to form a new government in Italy has unsurprisingly gone down well with investors," said Jack Allen-Reynolds, senior Europe economist at Capital Economics.
"Draghi's economic expertise, experience and political skills put him in an excellent position to lead the country through a crisis ... however, it is still unclear whether Draghi will succeed in forming a government of national unity."
Italy has been hit by the COVID-19 pandemic and economic crises against the backdrop of political uncertainty battering the country.
The STOXX 600 index rose 0.7% for the third straight day, with Novo Nordisk A/S jumping 4.2% after the diabetes drug maker gave upbeat sales and profit forecasts for 2021.
Siemens AG rose 1.7% as the German engineering company raised its 2021 outlook after beating first-quarter expectations on a faster-than-anticipated recovery from the COVID-19 downturn in China and Germany.
Publicis Groupe SA rose 6.2% after the world's third-biggest advertising group, beat market expectations for fourth-quarter organic growth thanks to its data company Epsilon.
Markets remained hopeful for U.S. President Joe Biden's proposed $1.9 trillion COVID-19 aid bill as the Senate took steps to allow Democrats to pass Biden's package without Republican support.
Also helping lift sentiment was news that Britain's GlaxoSmithKline and German biotech firm CureVac struck a 150 million euro ($180 million) deal to develop next-generation vaccines against COVID-19 that target several variants in one product.
All of the major European sector indexes were in positive territory in early trading.
European stocks have been steadily rising along with other major markets after losing over 3% last week on concerns around the slow roll-out of COVID-19 vaccines in the euro zone.
A pause in a social media driven rally that drove up prices of silver as well as certain stocks including GameStop Corp has helped calm worries about potential losses incurred by certain hedge funds causing disruption to markets as a whole.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)