Ital­ian stocks lift Euro­pean bourses

Irish Independent - Business Week - - FRONT PAGE -

ITAL­IAN stocks turned from a drag into a boost for Euro­pean mar­kets yes­ter­day as signs the govern­ment would tar­get a lower bud­get deficit quelled in­vestors’ fears of a dam­ag­ing show­down with the Euro­pean Com­mis­sion.

US stocks were head­ing for an­other record in mid­morn­ing trad­ing there, as in­vestors re­mained op­ti­mistic about the world’s big­gest econ­omy.

Ital­ian bank stocks jumped as much as 3pc af­ter govern­ment bond yields fell back and the spread to Bunds nar­rowed thanks to re­ports the govern­ment there was tar­get­ing a lower bud­get deficit in 2020 and 2021. Still in the thrall of devel­op­ments on the Ital­ian front, the pan-Euro­pean STOXX 600 climbed 0.65pc near the close, with bank stocks the best-per­form­ing.

Italy’s FTSE MIB out­per­formed, up 1.3pc.

Banks, which have large sov­er­eign bond hold­ings, suf­fer the most from sell­offs in the bond mar­ket and the in­dex saw its fifth con­sec­u­tive day down on Tues­day be­fore news the Ital­ian govern­ment was aim­ing for a lower bud­get deficit.

“Any in­di­ca­tion from the govern­ment that may deny such in­di­ca­tions and lead to a step up in con­fronta­tion will neg­a­tively af­fect BTP spreads,” said Unicredit an­a­lysts. “The sit­u­a­tion re­mains fluid and mood can make sud­den U-turns, depend­ing on a rather un­pre­dictable news flow.”

Ire­land’s Iseq Over­all In­dex was per­form­ing well soon be­fore the close, hav­ing added 1pc, or 67.54 points, to 6,540.18.

Ryanair re­gained some of the ground it lost ear­lier in the week af­ter it is­sued a profit warn­ing. Its shares were 2.6pc higher at €11.63 as the end of the ses­sion ap­proached. Shares in Bank of Ire­land were up 2pc at €6.84, while AIB was 1.3pc higher as the close neared. Per­ma­nent TSB was down 1.4pc. Home­builder Abbey was 4.5pc lower at €14.70. The com­pany, headed by Charles Gal­lagher, holds its AGM in Dublin to­mor­row.

The UK’s FTSE-100 was 0.5pc higher as the ses­sion neared its end. Ger­many’s DAX was 0.4pc lower. France’s CAC-40 was up 0.6pc. Oslo-listed alu­minium firm Norsk Hy­dro was a big faller yes­ter­day, tum­bling as much as 13.6pc af­ter an­nounc­ing it would shut all out­put from its Alunorte alu­mina re­fin­ery in Brazil.

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