Election jitters weigh on Milan, other markets mixed
Standard & Poor's warning worries Italian equity investors20 February, 19:37
On the Milan Stock Exchange, weakness in banks and telecom stocks also pulled the FTSE Mib down by 0.82% in trading, to end the day at 16,527 points.
However, the Italian bond spread with the German benchmark remained stable, closing the day at 277 basis points while the yield on 10-year paper stood at 4.43%.
Fears over the outcome in the Italian vote were solidified by warnings from ratings agency Standard & Poor's, which said that Italy risks losing its momentum to continue necessary structural reforms after the upcoming election.
"We believe that there is a risk that after the elections...there may be a loss of momentum on important structural reforms to improve Italian growth prospects," said Moritz Kraemer of Standard & Poor's.
Italians vote on Sunday and Monday and although the centre right had been trailing Pier Luigi Bersani's centre left by double figures in the polls, ex-premier Silvio Berlusconi managed to narrow the gap to under 5% in most polls before a pre-election blackout on the publication of opinion surveys kicked in earlier this month.
Berlusconi, a 76-year-old media magnate, now claims that the centre right has overtaken the centre left. The centre left dismissed the claim.
In other European markets, Frankfurt's DAX fell by 0.30% to reach 7,728.90 points while Paris's CAC 40 fell by 0.69% to close at 3,709.88 points, and Spain's IBEX 35 closed trading 0.76% lower at 8,163 points. Only London's FTSE 100 ended the trading day on a positive note, gaining 0.26% to close at 6,395.37.