Markets end losing streak
After rising to what many economists called an “unsustainable” level of 7.4%, on Wednesday, Italy’s borrowing costs reduced slightly, with yields falling to just below the 7% mark.
The country also sold €5 million in short-term treasury bills at a record high interest rate of just over 6% yesterday.
But further confirmation that prime minister Silvio Berlusconi will formally step down within the week — via the naming of Mario Monti as likely custodian of national affairs — eased mounting investor fears Italy might not be able to stop the eurozone debt crisis spreading to its shores.
Italy’s national benchmark index — the Borsa Italiana — was up by just under 1% yesterday. The DAX in Frankfurt was up by 0.66%. Meanwhile the ISEQ in Dublin finished the latest trading session level.
The CAC-40 index in Paris dipped by 0.34% while the FTSE in London was down by 0.28%, having largely eradicated earlier falls.
Spain’s IBEX was also down by just over 0.3%.
Concern over the spread between German and French 10-year bond rates hitting a record high of 1.7%, however, diluted any widespread gains on the markets and kept investors jittery over the chances of the debt crisis spreading still further.
Comments from Economic Commissioner Olli Rehn over the prospects of a continent-wide return to recession during 2012 and further delays in reaching an agreement over the establishment of a more powerful bailout fund didn’t help matters.
In Dublin, there were good gains for the likes of FBD, CRH, Providence Resources, Aer Lingus and Ryanair, while DCC, Dragon Oil, Elan, Glanbia, Origin Enterprises, Tullow Oil, Smurfit Kappa and United Drug all fell.
More positive news from Italy initially upped the main Wall Street exchanges; but late in the afternoon — European time — earlier gains on the Dow Jones and the S&P 500 were slipping, while the Nasdaq had fallen below its Wednesday close.
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