Milan loses 2.2% after Monti announces resignation

Spread widens to 351 points

Milan loses 2.2% after Monti announces resignation

Milan, December 10 - The Milan Stock Exchange reduced earlier Monday losses closing the first trading day of the week down just over 2% as investors reacted nervously to Premier Mario Monti's announcement Saturday that his resignation was imminent. After having dropped by more than 3% in early trading, with banks especially hit hard by sales, Milan's FTSE MIB ended the day down 2.2%, at 15,354.01. The news of the resignation of Monti, whose technocratic government is credited with having saved Italy from a debt-induced disaster, rocked investor confidence in Italian debt. The spread between Italy's 10-year bonds and their German equivalent on Monday at one point spiked above 360 basis points, before closing at 351 points from a Friday close of 323 points, as markets reacted to the threat of renewed political chaos in the country. Other European markets closed essentially flat on mixed macro news, including better-than-expected US-unemployment figures and a report from the OECD which forecast divergent paths between the US and the UK, seen growing on the one hand, and a eurozone and Japan expected to remain mired in recession in the year ahead. London's FTSE 100 ended the day slightly higher, at 5,921.63, Paris's CAC 40 closed up 0.18% at 3612.10, Frankfurt's DAX ended up 0.17% at 7530,92 and Spain's IBEX 35 ended the day down 0.56% at 7804,40. In Milan, the banking sector was particularly hard-hit, with Mediolanum closing -5.9%, followed by MPS, down 5.8%, and UniCredit and Intesa Sanpaolo each losing 5.15%.

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