UPDATE 2-China measures, Italian banks lift European shares to record close

(For a live blog on European stocks, type LIVE/ in an Eikon
news window)
* UBI Banca jumps on upbeat earnings outlook
* German stocks hit new record, supported by Chinese
stimulus
* Faurecia posts rise in annual profit, boosts automakers

(Updates with closing price)
By Ambar Warrick and Sruthi Shankar
Feb 17 (Reuters) - European shares hit a record high close
on Monday as a rally in Italian banks and fresh attempts by
China to limit the economic impact of the coronavirus outbreak
lifted investor spirits.
Despite a U.S. holiday dulling market activity, the
pan-European STOXX 600 index .STOXX rose 0.3%, with
trade-sensitive German stocks .GDAXI hitting all-time highs as
Beijing stepped up stimulus measures. Adding to the upbeat mood, Italy's fifth-biggest bank UBI
Banca UBI.MI jumped 5.5% after saying it aimed to nearly
double net profit in the next three years, sending a broader
index of Italian banks .FTIT8300 up 1.8%. Even as China reported more coronavirus cases over the
weekend, prompting economists to cut growth forecasts, investors
took heart from the central bank's move to cut interest rates.
"The fact that China keeps signalling that they're ready to
somewhat bubblewrap the economy by pumping in stimulus - that's
what's keeping markets in the green today," said Connor
Campbell, analyst at financial spread better Spreadex.
"This week is interesting because we've got manufacturing
PMIs (on Friday), I think it will give an idea of some impact on
supply chains from the coronavirus."
Meanwhile, euro zone finance ministers will also discuss a
document that calls for a more growth-friendly fiscal policy as
recession fears grip Germany and the coronavirus outbreak
threatens global growth. Automobile stocks .SXAP , were the best performing European
sector, led by French car parts group Faurecia EPED.PA after
reporting a rise in annual profits and sales. In merger news, France's Alstom ALSO.PA rose 3.5% after
the maker of TGV bullet trains said it was in talks to buy the
train business of Canada's Bombardier BBDb.TO in a potential
$7 billion deal. Meanwhile, Finland's Kone KNEBV.HE slid 4.6% as it dropped
out of the auction for the 16-billion-euro elevator unit of
Thyssenkrupp TKAG.DE after the German conglomerate shortlisted
two private equity consortia for the sale. German herbicide providers Bayer AG BAYGn.DE and BASF SE
BASFn.DE fell 1.9% and 1%, respectively, after a U.S. peach
grower was awarded $265 million in a lawsuit against the two.