Italian stocks turn to gains despite vote fears
After opening lower on Tuesday, the Italian FTSE MIB increased, led by the country’s troubled banks, despite fears related to the constitutional referendum which is taking place on Sunday.
Italian banks may need a bailout from the European Central Bank as a result of bad loans, but a deal may be difficult to be reached if Prime Minister Matteo Renzi (pictured) loses the vote which would cut the powers of the Senate. If the government is not supported by the citizens in the referendum, chances are high that far-right Five Start Movement which is strongly against the euro area will come to power.
After Monday’s losses of some 4%, the banks were the biggest winners of the FTSE MIB. Banca Monte Paschi dei Siena, the world’s oldest bank, jumped 4.41% to trade for €18 per share at 9:46 a.m. CET after it was announced that its bond swap was underway. Banco di Brescia was 2.71% and Intesa Sanpaolo gained 1.64% at 9:49 a.m. CET.
A sentix survey published earlier in the day showed that over 19% of investors believe Italy could leave the Eurozone in the next 12 months.