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Milan bourse flat as investors await new Renzi government

But bond market 'approves' of premier-designate, spread at 193

17 February, 19:57
Milan bourse flat as investors await new Renzi government (see related stories) (ANSA) - Milan, February 17 - Italy's stock exchange closed flat after a lackluster trading day as investors awaited premier-designate Matteo Renzi's new government, analysts said.

The FTSE-Mib index added 0.11% to close at 20,459 points.

Milan iss the leading European stock exchange since the beginning of the year at +7.7%, the Il Sole 24 Ore financial newspaper reported.

After receiving his government-formation mandate earlier on Monday, Renzi vowed to complete electoral reforms by the end of February, followed ''immediately afterward by labor reforms in March, public-administration reforms in April and fiscal (reforms) in May''.

Soon after Renzi spoke, the yield on 10-year Italian bonds fell to 3.61%, its lowest since January 24, 2006, while the spread between 10-year Italian paper and the ultra-safe German bund narrowed to 193 points, down from 200 at Friday's close.

Both figures indicate renewed investor confidence in Italy's ability to rebound from its worst postwar recession, in keeping with market optimism since a Renzi government became all but certain last week.

On Friday, the Milan bourse rose to its highest level since July 2011 on the prospect of the business-friendly mayor of Florence taking over the national government. But Fitch Ratings agency maintained a negative outlook on Italy as it embarks on a new administration.

Renzi ''will probably face the same difficulties as his predecessor in enacting reforms that would restart Italy's growth and competitiveness'', the agency said.