Italy’s Benchmark Index Now Down 30% As The Country Passes 10,000 Coronavirus Cases

The FTSE MIB, Italy’s benchmark stock market index that consists of the 40 most-traded stock classes on the exchange, is now down more than 30% in the last week following the coronavirus outbreak in the northern part of the country.

Fundamental analysis: Italy exceeds 10,000 coronavirus cases

Angelo Borrelli, Italy’s Civil Protection Chief and Coronavirus Emergency Commissioner, said that the number of infected persons from the coronavirus has surpassed 10,000, while the death toll has risen to 631.

Italians were told to stay home, and the Government has banned all public gatherings including weddings, funerals, and all sports events. In essence, the entire country is on lockdown until April 03 the earliest.

Earlier this week, the entire country was placed on lockdown to limit the spreading of the virus, while the Government promised to increase the budget to tackle the outbreak anywehre from 7.5 billion euros to 25 billion euros.

The bank expects Italy’s economy to contract 7.5% in the first quarter.

Technical analysis: New 40-month low printed

Today the FTSE MIB printed the lowest levels seen since December 2016, meaning that the stock index has now lost more than 30% compared to three weeks ago. If the multi-year low around the 18,000 handle is broken, this opens the door for a move to 17,300 first, and then 15,000.

Any trip below the 14,900 mark will mark a new 8-year low for the index. Moreover, if the current situation prolongs and Italy is still placed under lockdown, we can expect further losses for the economy, and for the FTSE MIB as well.

Summary

Italy’s benchmark index FTSE MIB has lost around 30% in the previous three weeks after Italy became the hotspot of the coronavirus outbreak in Europe. The entire country is placed on lockdown which is expected to have serious ramifications on the national economy.