Milan

Milan gains almost 1% while other euro markets soften

Spread between Italian, German bonds steady at 256 basis points

Milan gains almost 1% while other euro markets soften

Milan, August 7 - Milan's main financial market gained almost 1% on Wednesday, while other European markets softened amid concerns over central bank policies. The FTSE-Mib climbed by 0.93% to close at 16,838 points while London's FTSE shed 1.40% ending trading at 6,511.21 after the Bank of England said it had no immediate plans to raise its benchmark interest rate. The central bank also warned that it will not reduce bond purchases until the United Kingdom's unemployment rate falls below 7%. With the national jobless rate at 7.8% in the last quarter, the BOE expects it will stay above 7% for as long as the next three years. At the same time, investors were digesting hints that the United States Federal Reserve may be nearing the end of its stimulus program, which has been responsible for significant financial markets gains. Chicago Fed President Charles Evans said Tuesday that, depending on the economic and financial data coming in, the U.S. Federal Reserve could scale down its enormous bond-buying program later this fall. Meanwhile, the spread between Italy's 10-year bond and its German counterpart closed at 256 basis points - essentially unchanged from Tuesday's closing spread of 255 basis points. The yield on Italian 10-year paper closed at 4.25%, unchanged from the previous day. 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 fell by 0.47% to close at 8,260.48 points, while Paris's CAC 40 gained 0.15%, ending trading at 4,038.49 points, and Spain's IBEX 35 gained 0.52% to close at 8,574.10 points.

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