Sunday 11 December 2016

European markets lower on Italy fears

Bloomberg

Published 29/11/2016 | 02:30

An customer exchanges US dollars to Egyption Pounds in a foreign exchange office in central Cairo, Egypt
An customer exchanges US dollars to Egyption Pounds in a foreign exchange office in central Cairo, Egypt

Nervous investors sent European shares lower yesterday, with just days left before a crunch vote on constitutional reform in Italy. If it's rejected, the Italian government could collapse and bank shares will almost certainly be hit. At the moment, it looks as if the reforms will be opposed.

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Shares in Italian lenders declined on rising concerns about risks to their financial stability from the referendum, bringing an end to a three-week rally in European shares.

Banca Monte dei Paschi di Siena, the lender burdened by bad loans and under pressure to raise fresh money, tumbled as much as 17pc in early trading before paring declines.

UniCredit and Intesa Sanpaolo fell at least 2.1pc at the open, dragging the FTSE MIB Index to one of the worst performances in western-European markets. It closed down 1.8pc.

"It's a nervous market at a time when liquidity isn't great," said Kevin Lilley, a manager of euro-area equities at Old Mutual Global Investors in London.

In Ireland, the ISEQ Overall Index was 1.2pc lower, at 6,204.25.

It was also weighed down by financial stocks. Shares in AIB - still nearly 100pc-owned by the State - fell 6.5pc.

Shares in Permanent TSB were down 4.3pc at €2.51 and shares in Bank of Ireland declined 2.4pc to just over 20 cent.

Other significant fallers included CRH, which was 2.3pc lower at €31.20.

Troubled food group Aryzta was 1.1pc higher in Dublin at €39.43. It released a first-quarter update that Davy Stockbrokers said showed a "solid underlying performance" in Europe.

The UK's FTSE-100 was 0.6pc lower at the end of the session. Germany's DAX was down 1.1pc, and France's CAC-40 was 0.9pc lower.

Irish Independent

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