The day of the Milanese Stock Exchange was punctuated by a new barrage of suspensions, collapses of bank stocks and a thud in the indices. The Ftse Mib closed down by -6,65% to 14.676 points: to find a worse performance (for domestic and international reasons) than today in Piazza Affari we need to go back to 6 October 2008 when the Milan Stock Exchange lost on 8,24 ,XNUMX%. Small consolation is the fact that the Star, Small cap and Micro cap indices lose much less than the major index.
In the palaces, politics and the social partners have consumed a tough tug of war on the balance sheet and more generally on the measures to be taken urgently to implement the budget balance advance to 2013. The spread between the BTPs and the Bunds widens again at 290,5 basis points. And the markets voted with their feet: by selling.
However, the collapse came with the succession of rumors about a possible downgrade of France and with the negative opening of Wall Street. Losses and panic also affected all the other European stock exchanges: the Ftse 100 closed down by 3,05%, the Dax by 5,13%, the Ibex by 5,49% and the Cac by 5,45. XNUMX%.
Despite the positive start across Europe (thanks to the Fed and the positive reactions from Wall Street and Asia), in Milan the stock markets have been in trouble since the morning, weighed down by worries about the balance sheet and the clashes over the measures on which they are government technicians at work.
The auction of 12-month BOTs gave little relief to the lists which, after having eliminated the losses, resumed their downward path while the other Stock Exchanges remained in positive territory.
In Europe, moods change with negative futures on Wall Street and with rumors about a possible downgrade for France, which have already been circulating for weeks but which became more pressing on Monday, after the US debt downgrade. And with fears of a liquidity crisis (and therefore public bailout) of the French banking giant Société Générale which collapsed by 18,85% on the Stock Exchange.
Sales spilled over into all banking stocks, but raw materials and construction also suffered. Nicolas Sarkozy's response to the downgrade rumors already arrived in the morning with an extraordinary meeting and the promise of the announcement of new anti-deficit measures on August 24th.
Meanwhile Moody's and Fitch confirmed their triple A rating and stable outlook, but it is a record for France's debt risk with CDS rising to 171 points. Yield spreads on the bund are also back in tension in Europe while purchases favor flight to quality: German government bonds and gold that in New York the price of gold has reached a new historical record at 1779,14 dollars an ounce .
On Wall Street, both the Dow Jones -3,19% and the Nasdaq -2,58% lost. The storm that has hit the markets, reports the Wall Street Journal, has forced the CEOs of Bofa and Citigroup to calm the fears of employees. "We must remember that our society is financially strong," Bank of America Chief Executive Officer Brian Moynihan wrote in a memo.
“The decline is difficult to observe and of course reminds us of what happened a few years ago. But the similarities are few,” said Citigroup CEO Vikram Pandit.
Even in Piazza Affari the banks are in free fall (-10% the sector index) and many titles have ended up in a volatility auction. Banco Popolare plunged by 9,36%, Intesa Sanpaolo by 13,72%, Unicredit by 9,37%, Mps by 9,78%, Popolare Milano by 8,89%, Ubi by 10,17%. Insurance companies are also bad (-7%) with Fondiaria Sai (-9,56%) also weighed down by press rumors about new losses in sight.
Those that hit the price lists are real sales: Consob has intensified monitoring of exchanges, verifying that short sales are modest. But the thud concerns practically all sectors with bursts of generalized suspensions: the car yields around 6,34% with Fiat collapsing by 8,23%; energy, raw materials and industry fell by 5% and construction by 5,69%. Foods are trending and losses are reduced by consumer goods, health care and chemicals. Prsysmian among the worst with a drop of 9,35%. Only Tod's (+2,54%) and Parmalat (+2,06%) are positive on the Ftse Mib
