Bags and the Cyprus effect on Europe | Milan Stock -0.85%

Cyprus Banks
Cyprus Banks

Starting with European stock exchanges, the Milan stock exchange closes down in line with the rest of Europe but in the afternoon reduces losses yielding on the main list of the 0.85% to 15,924 points. The FTSE Mib has come to lose up to 2.9% in one day. The index gives that 0.75% of AllShare volumes were in decline for a total of $ 2 billion. A weight on European markets is proposed for the rescue of Cyprus drawn by the Eurogroup which provides for the first time in Europe the compulsory levy from the deposits of Cypriot depositors. According to a broker quoted by Reuters about the Milan Stock.

Cyprus Effect

Cyprus Effect

“It is a very particular and localized problem such as the bank and non-state problem in the case of Greece.” According to the market strategist at IG, Vincent Longo about the case of Cyprus. “Today was created the only opportunity to make a profit at home. The greatest threat to this moment is to see them again in the important suburb of Europe, namely Spain and Italy. The hypothesis of contagion outside the small Cypriot economy still seems very limited.”

Cyprus Banks

Cyprus Banks

In Europe there’s a black mesh bag to Madrid, the Ibex 35 index is losing the 1, 3% to 8507.80 points. Closures also fell in Paris Cac 40 – 0.48% to 3,825.47 points, Frankfurt’s DAX -0.40% to 8010.7 points with the London FTSE 100 index which leaves the field at 0, 49% to 6457.92 points. As far as the Spread goes, the story of Cyprus also weighs on the debt market and is the widening gap between the BTP and the German ten year Bund that comes to 323 basis points from 314 on Friday. The rate of return of the Italian title is at 4.63%.

In Italy there is no danger of contagion as the first chairman of Consob, Giuseppe Vegas has reassured(Cyprus is very small and very special) and then Abi stated that the exposure of Italian banks to Cyprus is significantly below one billion euro.

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