Milan

Markets lose ground, slack trading while Sandy shuts Wall St

Italian spread rises, Milan bourse sinks on govt uncertainty

Markets lose ground, slack trading while Sandy shuts Wall St

Milan, October 29 - Fear of a new Italian political crisis set the Milan bourse sinking and the Italian spread rising on Monday, while other major European stock exchanges slipped less dramatically in the absence of signals from Wall Street, which was shut down for Hurricane Sandy on Monday. The spread between interest rates on Italian and German bonds widened dramatically on Monday to close at 355 basis points after ex-premier Silvio Berlusconi threatened to pull his support for Premier Mario Monti on Saturday, a move that could wipe out the technical government's parliament majority. The spread had closed at 336 points on Friday. The yield on Italian 10-year bonds crossed the 5% threshold on Monday to close at 5.01%. The Italian spread is an important gauge of the market's confidence in Italy's ability to pay down its huge debt. Milan's FTSE MIB index lost 1.51% to close at 15,349 points in slack trading. Madrid's Ibex 35 and Paris's CAC 40 indices lost 0.59% and 0.76% respectively. London's FTSE-100 fell 0.20%, and Frankfurt's DAX slipped 0.4%. Meanwhile, Athens Athex index plunged 6.28% on Monday after the German government's spokesperson said, "A new cut in Greek debt is not in discussion". The spokesperson's words confirmed what was said by German Finance Minister Wolfgang Schaeuble over the weekend.

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