The Milan stock exchange's FTSE
Mib index dropped 1.84% in early trading on Monday, taking it
down to 19,973 points, while Italy's bond spread approached the
the 300 basis-points mark.
The turbulence comes after the European Commission sent the
Italian government a letter expressing concern about Italy's
budget plans and the intention to let the deficit to climb to
2.4% of GDP next year.
Bank stocks were hit hardest on Monday, amid fears of lenders
needing new capital increases.
Carige, which is not in compliance with ECB rules, fell
5.09%, MPS's share price dropped 4.9%, taking it below two euros
to 1,91 euro, while Banco BPM, one of the lenders most active in
offloading NPLS, shed 4.6%.
The spread between Italy's 10-year BTP bond and the German
Bund climbed to 297 basis points.
The yield on the BTP went up to 3.49%.
The spread, an important measure of Italy's borrowing costs
and a gauge of investor confidence, closed at 285 points on
Friday.
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