Italy con­cern pushes Europe lower

Malta Independent - - FINANCIAL -

On Mon­day ris­ing con­cerns about risks to Ital­ian lenders’ fi­nan­cial sta­bil­ity from the up­com­ing ref­er­en­dum brought an end to a three-week rally in Euro­pean shares.

Uni­Credit SpA and Banca Monte dei Paschi di Siena SpA de­clined more than 3.8 per­cent af­ter the Fi­nan­cial Times re­ported that as many as eight Ital­ian banks risk fail­ing if Prime Min­is­ter Mat­teo Renzi loses the vote on con­sti­tu­tional re­form this week­end. That sent the FTSE MIB In­dex down 1.5 per­cent, one of the worst per­form­ers in western-Euro­pean mar­kets.

The Stoxx Europe 600 In­dex slid 0.4 per­cent at 10:19 a.m. in Lon­don, trim­ming an ear­lier drop of as much as 1 per­cent. The vol­ume of shares chang­ing hands was 14 per­cent lower than the 30-day av­er­age. The eq­uity bench­mark is de­clin­ing af­ter re­bound­ing 4.2 per­cent from a Novem­ber 4 low amid spec­u­la­tion that Don­ald Trump’s U.S. elec­tion win will lead to in­creased fis­cal spend­ing.

Af­ter the U.K.’s vote to leave the Euro­pean Union and Trump’s un­ex­pected win, in­vestors are on edge about the prospects of po­lit­i­cal and eco­nomic in­sta­bil­ity should Renzi lose the De­cem­ber 4 vote. A gauge of Ital­ian lenders on Mon­day headed for its low­est level in more than three months, tak­ing its 2016 slump to 51 per­cent. Royal Bank of Scot­land Group Plc lost 2.8 per­cent on a re­port that it may strug­gle to sell all of its Wil­liams & Glyn unit.

Also weigh­ing on eq­ui­ties to­day is in­vestor skep­ti­cism about OPEC’s abil­ity to reach a deal to cut out­put at a meet­ing on the 30 Novem­ber. Eni SpA and Tul­low Oil Plc fell more than 1 per­cent as oil slid be­low $46 a bar­rel, pac­ing losses among en­ergy pro­duc­ers.

Overnight, the MSCI Asia Pa­cific In­dex rose 0.8 per­cent, and Ja­pan’s Topix in­dex rose for the 12th day in a row with banks lead­ing gains.

This ar­ti­cle was com­piled by BOV As­set Man­age­ment Lim­ited, a mem­ber of the BOV Group. BOV As­set Man­age­ment,TG Com­plex, Suite 2, Level 3, Brew­ery Str., Mriehel BKR 3000. Email: in­foas­set­man­age­ment@bov.com In­ter­net ad­dress: www.bo­vas­set­man­age­ment.com. BOV As­set Man­age­ment is li­censed by the MFSA.

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