28/09/18

Italian Stocks Crash Most In 2 Years, Bond Yields Soar Amid Budget Deficit Liquidation Panic



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Italian Stocks Crash Most In 2 Years, Bond Yields Soar Amid Budget Deficit Liquidation Panic
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After yesterday's last minute decision by Italy's ruling coalition to boost the country's 2019 deficit to 2.4% of GDP, a number that challenged Brussels and its demands for a deficit no greater than 2.0%, we said that it was only a matter of time before the market freaked out as Italy is now on collision course with Europe, and that time came this morning when traders dumped Italian assets en masse, as Italian markets, bank stocks and bonds all tumbled in unison as deputy premier Matteo Salvini vowed to "press ahead" with a budget plan including a deficit that would be three times larger than the deficit under the previous administration.

Italy's FTSE MIB stock index tumbled to session lows, down 3.7%, after opening sharply lower and failing to find a floor so far; this was the biggest intraday drop for Italian stocks since June 2016, with several banking stocks halted limit down.

The worst performing sector were ....

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