TEHRAN, October 02 -Stocks fell worldwide and European assets sold off on Tuesday after anti-euro comments from an Italian lawmaker dented the single currency and sent Italy’s bond yields to multi-year highs.
TEHRAN, Young Journalists Club (YJC) -Stocks fell worldwide and European assets sold off on Tuesday after anti-euro comments from an Italian lawmaker dented the single currency and sent Italy’s bond yields to multi-year highs.
A boost to investors’ risk appetite from the new U.S.-Mexico-Canada trade pact proved short-lived with the MSCI world equity index falling back 0.4 percent, its biggest loss in a month.
The leading index of euro zone stocks lost 1 percent and the pan-European STOXX 600 fell 0.7 percent, tracking Asian stocks lower and extending losses as Italian assets came under renewed stress.
U.S. futures also traded down 0.3 percent to 0.4 percent.
Claudio Borghi, the economics spokesman of Italy’s ruling League party, said in a radio interview that most of the country’s problems could be solved by having its own currency.
His comments drove Italian 10-year bond yields to a new 4-1/2-year high, pushing the spread between Italian and German yields to the widest for more than five years.
Shares in Italian banks, which have large sovereign bond holdings, hit a 19-month low, falling as much as 2.8 percent and Italy’s FTSE MIB tumbled 1.2 percent.
Clarifying his remarks later, Borghi told Reuters that Italy’s government has no intention of leaving the euro. However, the specter of a euro zone breakup and stern words from EU officials about Italy’s budget kept markets on edge.
Euro zone banks also dropped 1 percent as the comments reignited investors’ anxieties about contagion in the euro zone from Italy’s higher-than-expected budget deficit plans, which the government set out on Thursday.
Source: Reuters