Milan's major stock exchange leads small European rally
FTSE-Mib regains 1.77% after major losses one day earlier27 February, 20:08
(ANSA) - Milan, February 27 - After devastating losses on financial markets amid political chaos one day earlier, Milan's major stock index recovered a bit of lost ground on Wednesday.
The FTSE Mib gained 1.77% in trading to end the day at 15,827 points.
That hardly made up for the massive sell-off Tuesday that stripped 4.9% off the value of Italy's FTSE Mib index, which led the downward trend in many markets around the globe.
Investors had hammered European markets after inconclusive Italian elections led to renewed concerns that the eurozone crisis may once again reignite.
But by Wednesday, investors were somewhat calmer, narrowing the Italian bond spread with the German benchmark. That spread between Italian and German debt, an indicator of investor confidence in Italian government paper, narrowed very slightly to 336 basis points at the close of trading, a slight improvement from the 344-point spread reported on Tuesday.
That day's result represented a dramatic widening of the spread from Monday's close of 293 points.
Tuesday's collapse of confidence that Italy would be able to meet its debt obligations pushed up yields on the country's 10-year bonds to 4.9%, their highest level this year. But by Wednesday, the yield on 10-year Treasury bonds relaxed slightly to close to 4.81%.
Bond markets were encouraged by a successful Treasury auction of long-term debt Wednesday morning in Rome that raised 6.5 billion euros.
Italy sold 2.5 billion euros of its four-year bond at a yield of 3.59% and a further four billion euros of a new 10-year bond at 4.83%.
Still, those yields were considerably higher than at earlier auctions. The 4.83% interest rate on 10-year Italian bonds was the highest level since October. And the rate on five-year bonds of 3.59% contrasted badly with the 2.94% offered at last month's auction.
Other European equity markets ended on a positive note.
Frankfurt's DAX gained by 1.04% to reach 7,675.83 points, while Paris's CAC 40 rose by 1.92% to close at 3,691.49 points, Spain's IBEX 35 closed trading 1.85% higher at 8,136.70 points while London's FTSE 100 ended the trading day 0.88% higher, closing at 6,325.88.