Spread down 27 points, markets steady in modest trading

Milan bourse up 0.27%

Spread down 27 points, markets steady in modest trading

(ANSA) - Rome, August 1 - The spread between 10-year Italian bonds and the German benchmark dropped 27 points on the day and the Milan bourse was steady on Wednesday as European markets made modest gains and investors awaited signs from policymakers to back up the eurozone. The spread, a barometer of Italy's borrowing costs and of market confidence in its ability to weather the eurozone crisis, closed at 453 points a day after soaring to close at 480. The renewed pressure on Italy's bonds came with investors' starting to have doubts about European Central Bank President Mario Draghi's ability to deliver after saying last week that his body would do "whatever it takes" to save the struggling single currency. Italian Premier Mario Monti on Wednesday said Italy may need to ask for European rescue funds to be used to support its bonds if the money markets are slow to see the country's efforts to put its economic house in order. He stressed the use of the so-called spread shield would not mean that Italy would need a full-blown bailout. The Milan stock market was stable after the news Wednesday, earning 0.27% to close at 13,928 points. Modest gains were typical across Europe, where the Stoxx 600 index earned 0.32% on the day. Only Madrid and Frankfurt struggled to keep up, falling 0.51% and 0.18% respectively.

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