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Italy's leading financial index jumps 1.22% on Tuesday

Spread between Italian, German bonds holds at 198 basis points

07 January, 18:54
Italy's leading financial index jumps 1.22% on Tuesday (ANSA) - Milan, January 7 - Italy's leading financial index took a sizeable jump Tuesday and several other major European markets also rose, buoyed by lower-than-expected inflation numbers and the latest news from the United States Federal Reserve.

The FTSE-Mib ended the trading day fully 1.22% higher at 19,468 points as markets cheered the formal appointment of Janet Yellen as new chair of the Fed. Consumer prices for the eurozone rose by 0.8%, less than the 0.9% forecast by analysts, which suggested continued economic weakness in the region.

Some market watchers believe that will increase the likelihood of the European Central Bank considering stimulus measures for the lackluster region.

The ECB is expected to comment on Thursday after its first policy meeting of the new year.

On the Italian bond market, the spread between Italy's benchmark 10-year bond and its ultra-safe German counterpart was essentially unchanged from last week's close. The spread ended trading Tuesday at 198 basis points, with the yield on Italy's 10-year paper closing the day at 3.87%.

The spread between lending rates in the two countries is an important indicator of investor faith in the Italian economy. On other European markets Spain's IBEX 35 jumped by a whopping 2.88%, closing at 10,173.20, and Frankfurt's DAX rose by 0.80%, closing at 9,506.20 points.

In Paris, the CAC 40 gained 0.83%, ending trading at 4,262.68 points, while in London, the FTSE index of leading British shares rose by 0.37% on the day, closing at 6,755.45.