Italy won't quit the euro, says new economy minister

Cornelia Mascio
Giugno 13, 2018

Italian borrowing costs fell sharply on Monday, tightening their gap over German peers after the country's economy minister said the new coalition government had no intention of leaving the euro zone and planned to cut debt levels.

Euro zone banks rose 2.1 percent, boosting the pan-European STOXX 600 by 0.4 percent while Italy's FTSE MIB gained 2 percent and Spain's IBEX 0.9 percent. "There is no question of leaving the euro", Tria said, adding that the government would work actively to prevent the likelihood of such an event.

Tria also distanced himself from calls within the coalition for the government to issue securities to pay off individuals and companies owed money by the state - a highly controversial measure seen in markets as first step to exiting the euro.

Italian banks Unicredit SPA and Intesa Sanpaolo SPA led the European index, up 4.5 and 4.2 percent.

Swiss voters' rejection of a campaign to radically alter the banking system also helped boost sentiment.

Swiss consumer goods heavyweight Nestle SA was the biggest boost to the STOXX 600, rising 1.3 percent.

Optimism over European politics helped investors shrug off a fractious G7 summit marked by stark divisions between the USA and allies over trade.

The rise in safe-haven German bond yields came as fears of a global trade war weighed on broader markets after U.S. President Donald Trump backed out of a joint Group of Seven communique over the weekend.

The only sign of concern about trade was in the auto sector, which was the worst-performing, down 0.5 percent. "He will tax German autos".

Top of the STOXX 600 was Inmarsat (ISA.L), surging 12.7 percent to a five-month high after rejecting a takeover offer from USA firm Echostar (SATS.O).

"Echostar's approach puts Inmarsat clearly into play", said RBC analysts, pointing to SES (SESFd.PA), Eutelsat ETF.PA, ViaSat, mobile operators and private equity as potential counter-bidders for the company.

The stock is already up more than 150 percent this year, boosted most recently by a distribution deal with USA supermarket Kroger.

"Though the stock price moved materially to reflect this, our analysis at a local market level points to a USA opportunity more than double Kroger's initial commitment".

Altre relazioniGrafFiotech

Discuti questo articolo

Segui i nostri GIORNALE