Martedì, 25 Settembre 2018

Italian bond spread rises, European markets dip


(ANSA) - Milan, July 31 - European markets were stable
Tuesday, with most closing slightly below opening levels.
The Milan's FTSE Mib index slipped 0.6% to 13,890 points,
ending a run of four positive trading sessions in a row.
Fiat's losses weighed heavily on the trading session.
Stocks in the Fiat Group, which controls Chrysler, closed
4.4% down at 4 euros, recovering some ground after having
slipped 6% at one stage during the day.
Investors and analysts were disappointed by the Fiat
Group's second quarter results released Tuesday, which showed
lower profits than expected and increased losses from its
European operations.
Fiat and Chrysler CEO Sergio Marchionne defended the
embattled stock reiterating that the company expected to make
its 2012 targets.
Meanwhile, banks on the Milan bourse were split on a shaky
day for Italian bond spreads.
UBI stock rose 4.05% and BPM was up 2.92%. Italy's banking
giants, Intesa San Paolo and Unicredit, lost 2.18% and 2.12%
Madrid led European market declines despite a rally in the
morning. Madrid's Ibex 35 index closed down 1.31% at 6,713
London was next, with the FTSE-100 index sliding 1.02%.
Paris's Cac 40 index closed 0.87% down, while Frankfurt's Dax
index closed nearly flat, at 0.03%.
The spread between Italian and German bonds closed at 480
basis points with the Italian 10 year bond yielding 6%.
That represents a rise of almost 20 points during the day,
as the spread opened at 460.5 basis points.
The spread is a barometer of Italy's borrowing costs and an
indicator of investor confidence in the country's ability to
weather the eurozone crisis.
The spread between Spanish bonds and the German benchmark
closed at 546 basis points, with 10 year Spanish bonds yielding
Italian Premier Mario Monti and French President Francois
Hollande on Tuesday urged fast action on financial measures
agreed to tackle the eurozone crisis by European leaders at a
The pair spoke after a Paris meeting Tuesday aimed at
boosting confidence in the European economy and the single
European leaders agreed on a number of measures to combat
the eurozone crisis at the June summit, including plans to allow
EU rescue funds to be used to support the bonds of countries
facing soaring borrowing costs.
This mechanism, the so-called spread shield, was thrown in
doubt after the governments of the Netherlands and Finland
expressed reservations.
Monti is on a European tour to promote greater harmony in
efforts to protect the region's economy.
The tour includes meetings in Finland with Prime Minister
Jyrki Katainen, and in Madrid with Spanish Prime Minister
Mariano Rajoy.
Investors are expecting fresh action by policy makers,
following a declaration from European Central Bank President
Mario Draghi last week that he would do "whatever it takes" to
preserve the euro.
Markets are now anxiously awaiting Thursday's meeting of
the ECB to see what the central bank intends to do.

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