Lunedì, 24 Settembre 2018

Europe markets jump on bond auction, ECB rate expectations


Milan, April 23 - European markets broadly rallied
Tuesday following successful bond auctions in Spain and a drop
in Italian yields, which dipped below the 4.0% mark for the
first time since November 2010 amid signs the country's ongoing
political crisis may be reaching a conclusion.
Increasing investor bullishness in Mediterranean debt
paired with expectations that the European Central Bank may cut
interest rates following continued weak European economic data
also boosted markets.
In Europe, France's CAC 40 was the best performer Tuesday,
gaining 3.6% to close at 3783.1, followed by Spain's IBEX 35, up
3.3% at 8289.3 and Italy's FTSE MIB, which gained 2.9% to close
at 16490.8.
Frankfurt's DAX closed 2.4% higher at 7658.2, followed by
London's FTSE 100, up 2.0% at 6406.1.
Milan's stock exchange was boosted by expectations recently
re-elected President Giorgio Napolitano would soon name a new
government able to carry out a limited set of reforms to the
country's political system as well as growth-boosting measures.
The drop in the spread between Italy's 10-year government
debt and its German counterpart, to under 270 basis points,
boosted banks, which are a large component of the FTSE MIB.
The spread - a key indicator of investor confidence in
Italy's economy - ended the day at 268 basis points, down from
282 basis points Monday.
The prospect that a lower spread would translate into lower
borrowing costs for banks boosted Mediolanum (+5.7%), Mediobanca
(+5.4%) and Unicredit (+5.2%).
Other large caps, like Telecom Italia and Fiat, put in
strong performances.
Italy's former telecoms monopoly gained 6.3% on
expectations the firm would soon reach some sort of integration
agreement with mobile operator 3 Italia, owned by Hong Kong
billionaire Li Ka-shing's Hutchison Whampoa.
Italy's largest car-maker gained 6.2% following a report by
investment bank UBS, which raised the shares to ''buy''.

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