Investor Alert

Europe Markets Archives | Email alerts

May 18, 2018, 12:54 p.m. EDT

Italian stocks end sharply lower as country’s political drama weighs on Europe’s market

FTSE MIB loses 1.5%, Italian yields post biggest weekly rise since 2016

Watchlist Relevance

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    STOXX Europe 600 Index (SXXP)
  • X
    FTSE MIB Index (I945)
  • X
    Italy 10 Year Government Bond (TMBMKIT-10Y)

or Cancel Already have a watchlist? Log In

By Sara Sjolin, MarketWatch

AFP/Getty Images
The antiestablishment Five Star Movement

European stocks on Friday retreated from an almost-four month high as uncertainty about Italian politics contributed to a downdraft in a market already jittery over trade tensions between global superpowers China and the U.S.

What are markets doing?

The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +2.45% closed 0.3% lower at 394.67, breaking a three-day winning run. On Thursday, the pan-European benchmark ended at its highest level since Jan. 30, buoyed by a rally for oil-related companies.

For the week, the Stoxx 600 scored a 0.6% gain.

Italy’s FTSE MIB Index /zigman2/quotes/210598024/delayed IT:I945 +2.41%  slumped 1.5% to 23,449.65, as political developments in the country flustered markets. The index declined by 2.9% on the week, its largest weekly percentage decline since early March during the general election.

The yield on 10-year Italian bond /zigman2/quotes/211347230/realtime BX:TMBMKIT-10Y +3.64%  rose 9 basis points to 2.222%, according to Tradeweb. Over the course of the week, the benchmark Italian yield has jumped 33.4 basis points, its sharpest ascent since the middle of 2016.

Germany’s DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX +2.82%  lost 0.3% to end at 13,077.72, while France’s CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 +2.91%  ticked down 0.1% to 5,614.51.

In the U.K., the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +1.49%  slipped 0.1% to 7,778.79, pulling back from a record close logged on Thursday.

The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.2219%  fell to $1.1769 from $1.1794 late Thursday in New York.

What is driving the market?

Italian politics remained in focus on Friday after the country’s two biggest populist parties agreed on a coalition program that included plans to cut taxes and increase fiscal spending, but no direct threat to Italy’s membership of the eurozone.

The economic policies of the would-be government sets Italy on a possible collision course with Brussels that could revive memories of the eurozone debt crisis.

Credit-ratings firm DBRS warned on Thursday that the economic proposals from the 5 Star Movement and League could threaten Italy’s credit rating, according to Reuters.

Traders also watched the latest in the U.S.-China trade dispute after U.S. President Donald Trump somewhat dashed hopes of a trade deal between the two countries. At a press conference on Thursday, Trump said he doubts that the negotiations will succeed because “China has become very spoiled” on trade.

+11.47 +2.45%
Volume: 0.00
Dec. 7, 2021 11:03p
IT : Borsa Italiana
+639.91 +2.41%
Volume: 0.00
Dec. 7, 2021 5:35p
add Add to watchlist BX:TMBMKIT-10Y
BX : Tullett Prebon
+0.03 +3.64%
Volume: 0.00
Dec. 7, 2021 5:35p
DX : Xetra Indices
+433.15 +2.82%
Volume: 86,195
Dec. 7, 2021 6:30p
FR : France: Euronext Paris
+199.61 +2.91%
Volume: 96,223
Dec. 7, 2021 6:05p
+107.62 +1.49%
Volume: 704,818
Dec. 7, 2021 4:58p
US : Tullett Prebon
+0.0025 +0.2219%
Volume: 0.0000
Dec. 7, 2021 11:36p
1 2
This Story has 0 Comments
Be the first to comment
More News In

Story Conversation

Commenting FAQs »

Partner Center

World News from MarketWatch

Link to MarketWatch's Slice.