MARKET REPORT
EUROPEAN markets pushed ahead yesterday, brushing aside concerns that the Eurozone may be hit by a fresh bout of economic uncertainty triggered by the “no” vote in the Italian referendum.
The FTSE-100 Index closed 16.11 points higher at 6746.83, with a strong performance from mining stocks pulling the top-flight back into the black after losses over two straight sessions.
But the London market failed to match the gains clocked by Germany’s Dax and the Cac 40 in France, which rose 1.6% and 1% respectively in response to the defeat of far-right candidate Norbert Hofer in the Austrian presidential elections.
Milan’s FTSE MIB was registering some distress over Italy’s referendum vote on constitutional reforms, closing down 36.64 points at 17050.21.
A “yes” vote would have handed powers back to Italy’s regions, making the parliament’s lower house – the chamber of deputies – more powerful than the senate.
But the crushing defeat for the Italian government forced Prime Minister Matteo Renzi to resign and put the country’s battered banking sector firmly in the spotlight.
Analysts are fearful that Italian banks, many of which are burdened by bad debt, may now struggle to find refinancing during an ensuing period of political uncertainty.
Italian banks were in the doldrums, with UniCredit falling 3%, Intesa Sanpaolo dropping 1%, Banco Popolare down 7%, and Banca Monte dei Paschi di Siena 4% lower.
On the currency markets, the pound hit a four-and-a-halfmonth high against the euro following the result of the Italian referendum result.
However, an afternoon resurgence from the euro put the pound under pressure, with sterling down 0.8% versus the euro at 1.184.
The pound was also struggling against the US dollar, dropping 0.3% at 1.27. It came despite a positive update for the UK economy, with activity in Britain’s powerhouse services sector jumping to a 10-month high in November.
The biggest risers on the FTSE 100 Index were Antofagasta up 34p to 727.5p, Glencore up 12.4p to 290.3p, Carnival up 132p to 4,039p, Anglo American up 34p to 1,243p.
The biggest fallers on the FTSE 100 Index were Fresnillo down 48p to 1,150p, Randgold Resources down 185p to 5,640p, United Utilities down 24p to 858.5p, Severn Trent down 53p to 2,074p.