Live Markets: Italian shares lead losses in Europe
21/07/2022 08:53
* ECB meeting, Draghi in focus
* Italian stocks underperforming
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ITALIAN SHARES LEAD LOSSES IN EUROPE (0752 GMT)
Italy's blue chips slump nearly 2% as the country's
government crumbled, keeping broader European stocks under
pressure despite some relief over the resumption of Russian gas
flows.
The FTSE MIB stock index .FTMIB is down 1.8%,
underperforming the pan European STOXX 600 .STOXX index, down
0.2%.
The Italian banks index .FTITLMS3010 , highly sensitive to
the political turmoil in Italy, sinks as much as 5%.
In terms of single stocks, Sinch SINCH.ST , Seb SEBF.PA
and Saab SAABb.ST are the worst performers, sliding around 10%
after results. TOP/EQE
(Joice Alves)
*****
ECB'S TIME TO HIKE, ITALY'S TIME FOR MORE INSTABILITY (0727
GMT)
If the European Central Bank's inflation headache wasn't bad
enough, its first interest rate rise since 2011 will land on the
day the government of its third-largest member state, Italy,
looks set to collapse urn:newsml:reuters.com:*:nL1N2Z10E6.
Mario Draghi's time as prime minister is likely over after
his coalition partners refused to heed his call for unity.
Stocks have fallen and Italian borrowing costs are rising -- a
worry for an ECB desperate to contain market stress in its most
indebted members.
The euro is rising, however - helped by news Russian gas is
flowing again through the Nord Stream pipeline after a 10-day
maintenance shutdown urn:newsml:reuters.com:*:nL1N2Z2080.
Now investors are waiting for the bigger, if less dramatic,
event of the day.
With sources this week said the ECB was weighing up a 50
basis-point rate increase rather than the 25 earlier flagged, a
greater degree of uncertainty has crept into the meeting.
The other question is what detail the ECB might provide on a
planned tool to contain bond market stress. Italy's latest
turmoil makes that task all the more urgent urn:newsml:reuters.com:*:nL1N2Z20BK.
The ECB may look with some envy at the Bank of Japan which
earlier on Thursday maintained ultra-low interest rates and
signalled its resolve to remain an outlier in the
policy-tightening wave urn:newsml:reuters.com:*:nL1N2Z2005.
Key developments that should provide more direction to
markets on Thursday:
Central bank meetings in Turkey, South Africa
U.S. earnings: Blackstone, Dow Chemical Co, Freeport-McMoRan
Copper & Gold, AT&T, Philip Morris International, Travelers
Companies Inc, American Airlines, Twitter, Mattel
EU earnings: Ocado, SAP, Dassault
U.S. Initial Jobless Claims/Philly Fed business index
(Tommy Wilkes)
*****
FUTURES FLAT AHEAD OF ECB MEETING, DRAGHI AND GAS IN FOCUS
(0640 GMT)
European futures are flat as investors are cautious ahead of
an expected European Central Bank interest rate hike later in
the day, and following the collapse of Prime Minister Mario
Draghi's government in Italy.
But bringing some relief especially to the Dax .GDAXI ,
Russia resumed pumping gas through its biggest pipeline to
Germany on Thursday after a 10-day outage, the operator said,
easing Europe's supply concerns amid an economic tit-for-tat
with the Kremlin over its invasion in Ukraine. urn:newsml:reuters.com:*:nL1N2Z2080
Italy's bond yields soared in early trade and the premium
investors demand to hold its bonds over safer Germany climbed to
its highest in five weeks, after the government crumbled as
three of Draghi's main coalition partners snubbed a confidence
vote he had called to try to end divisions. urn:newsml:reuters.com:*:nL1N2Z10E6
In a data heavy morning, UK and euro zone flash PMI will
also be in focus, with a Reuters poll expecting them to have
fallen further in the month.
Data also showed that a surge in debt costs pushed up by
soaring inflation added to Britain's budget deficit last month.
urn:newsml:reuters.com:*:nL8N2Z21R0
There's also corporate earnings results for investors to
digest: Spain's Bankinter Q2 net profit fall 88% compared to
same period a year ago, while Electrolux profit misses forecast
as supply chain pain lingers. TOP/EQE
(Joice Alves)
*****
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Italian spreads and debt/GDP https://tmsnrt.rs/3zk2MZ0
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