Markets rebound on Italy bond auction

International stock markets rebounded yesterday after Italy ended a successful bond auction, despite suffering a two- notch credit downgrade by ratings agency Moody’s.

The Italian government successfully raised €3.5bn via the three-year bond sale, with the interest rate on its debt reducing from 5.3% to 4.65% since its last auction in June. It came less than 24 hours after the downgrade — from ‘A3’ to ‘Baa2’ — by Moody’s.

The immediate effect was an uplift across the major European bourses, with investor jitters easing considerably and markets hitting a one-week high.