Equities Indices

European shares mixed; Reported Italian budget reduction plans provide support

Share this article!

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.

Add Comment

Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site. Click here for more information.