EUROPE MARKETS: Italian Stocks Fight Back From Losses After Voters Reject Renzi In Referendum
05 Dezember 2016 - 12:10PM
Dow Jones News
By Sara Sjolin and Carla Mozee, MarketWatch
But Stoxx Europe 600 rises as investors shake off the news
Italian stocks swung higher Monday, fighting off earlier losses
that followed Prime Minister Matteo Renzi's resignation
announcement following defeat of a constitutional-reform
referendum, but questions remain about political uncertainty and
the possibility of another eurozone crisis.
The FTSE MIB was up 0.4% at 17,155.03 but the index had been
down by as much as 2.1%, FactSet data showed, as trading got
underway.
Bank shares bore the brunt of the selloff on the Milan
benchmark. The FTSE Italia All-Share Banks Sector Index fell 1.4%,
but that's an improvement from an intraday loss of 4.6%.
Among individual names, Banca Popolare di Milano Scarl (PMI.MI)
dropped 3.2%, and Intesa Sanpaolo SpA (ISP.MI) pared its decline to
0.7%. Shares in troubled Banca Monte dei Paschi di Siena SpA
(BMPS.MI) lost 0.8%. See: Monte dei Paschi advisers scramble for
rescue plan
(http://www.marketwatch.com/story/monte-dei-paschi-advisers-scramble-for-rescue-plan-2016-12-05)
UniCredit SpA (UCG.MI) fell 4%, with Italy's largest lender in
talks to sell its Pioneer Investments unit
(http://www.marketwatch.com/story/unicredit-in-talks-with-amundi-for-pioneer-sale-2016-12-05)
to Amundi SA (AMUN.FR) .
But across Europe, investors were shaking off the Italian news.
The pan-European Stoxx Europe 600 index rose 1.2% to 343.53.
Although the referendum officially was on Renzi's plan for a
legislative overhaul, the vote was widely seen in Italy as a vote
of confidence in the prime minister and his government. The fear
now is that the rejection sets the stage for an early election and
perhaps a Brexit or Trump-style political shake-up that ultimately
could lead Italy out of the eurozone.
The euro fell to a 21-month low
(http://www.marketwatch.com/story/euro-tumbles-to-21-month-low-against-dollar-after-italys-no-vote-2016-12-05)
against the dollar to $1.0505 before recovering to $1.0635. The
shared currency bought $1.0660 late Friday.
Read:What to know now that Italy has voted 'no,' with Renzi set
to quit
(http://www.marketwatch.com/story/what-to-know-now-that-italy-has-voted-no-with-renzi-set-to-step-down-2016-12-04)
And see:How Italy's referendum could spark a 'systemic crisis'
in the eurozone
(http://www.marketwatch.com/story/how-italys-referendum-could-spark-a-systemic-crisis-in-the-eurozone-2016-11-29)
"Exactly what this means for markets still needs to be
determined, but the uncertainty this brings certainly won't be
welcomed," said Tony Cross, market analyst at TopTradr, in a
note.
"However, this should make the recapitalization of Italy's
struggling banks that bit harder, and Mario Draghi had pledged that
any volatility stemming from this could be met with further
extensions to ECB bond buying," he said.
In the fixed-income market, the yield on Italy's 10-year bond
rose 8 basis points to 1.987% as prices fell.
European Central Bank President Mario Draghi is scheduled to
take part in the Eurogroup meeting in Brussels later on Monday. On
Thursday, the bank will hold its regular monetary policy meeting to
decide on the scope of its quantitative easing and other
measures.
Other indexes: Elsewhere in Europe, stocks were rising.
Germany's DAX 30 index climbed 1.7% to 10,693.09, with only
Commerzbank AG (CBK.XE) moving lower, by 1.2%.
France's CAC 40 index added 1.2% at 4,581.95, and the U.K.'s
FTSE 100 index
(http://www.marketwatch.com/story/ftse-100-rises-as-bank-shares-recover-from-downbeat-start-2016-12-05)
traded 0.5% higher at 6,764.36.
Economic news: The final November reading for the eurozone
services purchasing managers index came in at 53.8, slightly lower
than the flash reading of 54.1. That figure still marked an
11-month high.
Activity in the U.K. services sector hit a 10-month high in
November. The services PMI from IHS Markit/CIPS was 55.2, compared
with a 54.0 FactSet estimate.
(END) Dow Jones Newswires
December 05, 2016 05:55 ET (10:55 GMT)
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