European markets up, Italy and Spain lead

Spread drops below 410

European markets up, Italy and Spain lead

(ANSA) - Milan, August 21 - Markets surged across Europe on Tuesday, led by Milan's FTSE MIB index, and the Italian spread dropped below 410 points amid investor expectations European leaders will take concrete action to combat the ongoing economic crisis, aided by the introduction of public debt-reduction measures from the region's central bank. The Milan bourse jumped 2.4% to 15,330 points, leading the European stock gains. Monte dei Paschi di Siena, the world's oldest bank, advanced 7.2% to 0.24 euros, lifting the whole Italian banking sector. Some 370 million shares in the bank exchanged hands during the day's trading, for a total of about 3.1% of the bank's share capital. Some 10.7% of Monte dei Paschi's share capital has exchanged hands in the past three trading days after its chief Alessandro Profumo would not exclude the possibility of a reduction in the stake held by Monte dei Paschi's largest shareholder, a local banking foundation. Italy's stock market watchdog has said it is closely monitoring the bank's shares. The yield spread between 10-year Italian bonds and the German benchmark fell, as investor concern about the ongoing debt crisis was pared by the possibility of concrete action by the region's political leaders in conjunction with the European Central Bank. The spread, a barometer of Italy's borrowing costs in the eurozone crisis, closed at to 407.8 basis points, with Italian yields dropping to 5.6%. Spain sold bonds for a total of 4.5 billion euros, and its 12-month bonds posted yields of 3.2%, down from the 4% of a previous July auction. Madrid's Ibex index advanced 1% to 7,544 points, making it the second-best performer in the region. The Frankfurt bourse gained 0.9% to 11,255 points, while the Paris CAC 40 index advanced 0.9% to 3,513 points. London's Ftse-100 stock market rose 0.6% to 5.875.

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