Milan bourse drops sharply, spread up

Oct 8, 2018 12:14 pm

Bank stocks targeted, FTSE Mib index under 20,000 points


The Milan stock exchange’s FTSE Mib index dropped 1.84% in early trading on Monday, taking it down to 19,973 points, while Italy’s bond spread approached the the 300 basis-points mark. The turbulence comes after the European Commission sent the Italian government a letter expressing concern about Italy’s budget plans and the intention to let the deficit to climb to 2.4% of GDP next year.

Bank stocks were hit hardest , amid fears of lenders needing new capital increases. MPS’s share price dropped 4.9%. The spread, an important measure of Italy’s borrowing costs and a gauge of investor confidence, closed at 285 points on Friday.

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