Instability of Italian Government pushes markets lower
European shares fell on Friday, leading them to post a second straight week of losses, as worries about the stability of Italy’s government rattled investors and concerns about Sino-U.S. trade tensions lingered.
Milan’s FTMIB index tumbled 1.6% with Italian banks hardest hit after the leader of the ruling League party, Matteo Salvini, pulled his support for the country’s governing coalition on Thursday.
Markets have recently been sensitive to political developments in Rome with Italian bond yields jumping each time there were doubts about the soundness of the government.
The pan-European STOXX 600 index fell 0.2% after recording its best day in almost two months on Thursday, following upbeat trade data from China and a steadying of its currency. Also weighing on risk appetite was a Bloomberg report, which said that Washington is delaying a decision about licenses for U.S. firms to restart trade with Huawei Technologies, making investors nervous about a rampup of bickering in the ongoing trade dispute.
Helping to limit losses on the benchmark was the healthcare sector, boosted by Novo Nordisk, which beat quarterly operating profit forecasts and raised its 2019 sales outlook.
Swiss-based soft drink bottler Coca-Cola HBC’s first-half operating profit missed analyst expectations on Thursday, dragged down by higher costs, sluggish growth in its established markets and an unseasonable cool start to the European summer.
HBC, which produces CocaCola drinks under franchise for 28 mostly European markets and is one of the world’s biggest softdrinks bottlers, reported a 4.9% dip in operating profit to 288.9 million euros ($323.9 million), missing a company supplied average estimate of 319.8 million euros.
Net sales revenue rose 3.8% to 3.35 billion euros for the six months ended June 28, beating a forecast 3.34 billion euros. Restructuring undertaken in 2019 cost about 30 million euros. The company, which bought Serbian confectionary firm Bambi in June, also reported acquisitionrelated costs.