Thanks to Banks, Italy Stocks Reverse Peer-Beating 2015 Gain
- Monte Paschi lost 56 percent in 2016, trades near record low
- Uncertainty over bad loans, ECB scrutiny is worrying investors
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Italian stock bulls who hung in there after the FTSE MIB Index’s stellar run in 2015 are now feeling the sting.
The country’s benchmark gauge has suffered a whiplash-inducing reversal, going from one of the best to the absolute worst among developed markets in a little over a month. The biggest problem is the lenders, which represent almost a quarter of the index: worries about bad loans and European Central Bank scrutiny have sent Banca Monte dei Paschi di Siena SpA and Unione di Banche Italiane SpA down more than 40 percent this year.