European shares are mixed Wednesday afternoon, after reports suggest the Italian Government’s longer-term budget includes plans to reduce its 2.4% of GDP deficit target to 2.2% in 2020. That news helped support Italian banking stocks and reverse some of the declines seen Tuesday.
By 1535 BST, the EUROSTOXX 600 was up 0.61%, while the EUROSTOXX 50 had lost 0.14%. Regional bourses were similarly uneven. The German DAX fell 0.42%, however, the French CAC gained 0.52%, the Spanish IBEX rose 0.98% and the Italian MIB was 1.11% in the green.
Italian budget plans
Following Tuesday’s news that the Italian Government was planning to target a budget ratio of 2.4% of GDP, which could set it on a collision course with the EU fiscal rules, reports out Wednesday suggest things aren’t as certain as they seemed.
According to an Italian newspaper report, the Italian Government is only planning to target a budget deficit at 2.4% of GDP for one year, before cutting it to 2.2% of GDP in 2020 and again to 2% in 2021.
While Italy’s initial spending plans are much higher than the previous Government’s, the intention to reduce spending as a proportion of GDP in the coming years, has provided support for both the euro and the broader European stock market.
Italian bank stocks were among the big winners:
- Intesa Sanpaolo shares gained 1.68% to hit €2.14.
- Banco BPM shares climbed 2.64% to €2.01.
- UniCredit shares moved up 1.08% to €12.56.
Other stock movers
Outside of the Italian stock market, there were other notable movers, too.
Altran Technologies shares surged 7.86% to €8.03 following a ratings upgrade from Kepler Cheuvreux, who raised their 12-month target price to €10 and have a ‘Buy’ rating on the stock, up from ‘Hold’ previously.
However, Tesco shares sank after its interim profit report came in below expectations.