Milan

Milan, other European markets fall

Investors concerned over outlook for U.S., German economies

Milan, other European markets fall

Milan, May 30 - Milan's leading financial market, like most of its European counterparts, lost ground on Monday following weak economic reports from the United States and Germany. Milan's FTSE Mib fell by 0.91% to end the day at 17,058 points. Investors fretted after reports that a key measure of American manufacturing strength dropped last month to its lowest level since June 2009. The Institute for Supply Management reported its index of manufacturing activity fell to 49 in May from 50.7 in April. Weaker manufacturing suggests the overall U.S. economy will slow in the second quarter of this year. Meanwhile, the International Monetary Fund lowered its forecast for German growth this year. "Amid still elevated euro area uncertainty, we now project GDP (gross domestic product) in Germany to expand at around 0.3%," compared with a previous forecast of 0.6%, the IMF said in a statement. Still, the IMF predicted that Europe's biggest economy will experience an economic recovery in the second half of this year. Despite the news, the spread between Italy's 10-year bond and its German counterpart closed at 264 basis points, roughly unchanged from late last week. The yield on Italian 10-year paper closed at 4.16%. The spread between lending rates in the two countries is seen as an indication of investor faith in the Italian economy and its ability to cope with a lingering recession. On other European markets: Frankfurt's DAX lost 0.76%, closing at 8,285.80 points, while Paris's CAC 40 fell by 0.71%, closing at 3,920.67 points, and Spain's IBEX 35 shed 0.44% to close at 8,284.40 points. London's FTSE 100 fell by 0.88% points to close at 6,525.12 points.

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