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Market Reports

Friday 19 October 2018 12.30

Italian stocks sharply lower

Italian stocks were trading sharply lower on Friday as the drama of the country’s budget plan erupted anew and pushed up its sovereign bond yields amid worries that a market-disrupting conflagration between the European Union and Rome won’t be averted.

Italy’s FTSE MIB Italy index was down 1.6%, poised for a weekly drop of 2.5% and its fourth straight weekly slide, representing the longest such decline since a five-week retreat ended on the 8 June.

Italian political turmoil was dragging the pan-European Stoxx Europe 600 down 0.4%, but the index was nursing a weekly gain of about 0.4%. The U.K.’s FTSE 100 was trading virtually unchanged at 7,024.22, amid Britain’s own unresolved Brexit woes. The stock gauge was on track for a weekly gain of about 0.4%.

Germany’s DAX 30 meanwhile, was trading 0.4% lower, poised for a slight weekly advance of about 0.1%. France’s CAC 40 fell 0.8%, tracking a weekly decline of 0.4%, which would mark its fourth consecutive weekly drop.

Yields for 10-year Italian debt were at fresh 2014 highs at 3.777%, as the EU cautioned Rome that its budget draft would run afoul of rules in place for member countries. Meanwhile, the yields for the 10-year German paper at 0.402%, hitting its lowest since September. Investors tend to turn to German bonds, or bunds, as they are referred to by traders, as a haven during periods of heightened uncertainty in the eurozone because the country is the largest economy in that economic bloc. Bond prices rise as yields fall, and vice versa.

Japan’s Nikkei ended the week on a sour note on Friday, booking its third straight week of decline after tracking broader overnight losses on Wall Street and Europe.  The Nikkei share average at one stage dropped almost 2 percent to hit a six-week low of 22,212.57. By the closing bell, it was down 0.56 percent.

This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management, TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.

 

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