Italian Banks Lead Stock Rally as Renzi’s Party Wins VoteSonia Sirletti and Francesca Cinelli
Italian banks surged in Milan, leading gainers in the benchmark index, as Prime Minister Matteo Renzi’s party defeated the populist challenge of Beppe Grillo in the country’s European vote.
Banca Popolare dell’Emilia Romagna SC rose as much as 7.1 percent and was up 6.1 percent to 7.77 euros at 9:35 a.m. UniCredit SpA, the nation’s biggest bank, climbed 4.3 percent to
6.23 euros, while Intesa Sanpaolo SpA, Italy’s No. 2 lender, increased 4 percent to 2.41 euros. The Italian benchmark FTSE MIB index rose 3.4 percent, extending this year’s gain to 12 percent.
Italy’s results show “a political endorsement for Renzi, something that is critical to do the required reforms to recover growth,” Antonio Guglielmi, a London-based analyst at Mediobanca SpA, wrote in a note today.
Renzi’s Democratic Party, known as the PD, won 41 percent of the vote, followed by Grillo’s Five Star’s movement with 21.1 percent, according to projections cited by RaiNews24 television. The tally sets Renzi, 39, up for a victory in his first national vote, thus reinforcing his position in power.
The election outcome also pushed Italy’s 10-year yield down 15 basis points to 2.99 percent, the lowest since May 14. The spread between Italian 10-year yields and German bunds narrowed 16 basis points to 158 basis points. A basis point is a hundredth of a percentage point.