ROME: Shares in banks in Italy have rallied from opening losses following the rejection of proposed constitutional reforms in the country’s referendum. Milan’s stock market benchmark, the FTSE MIB, initially headed lower, led by banks with investors questioning whether some of Italy’s largest financial institutions will be able to raise the capital needed to shore up their finances. However, stocks recovered quickly. Banca Monte dei Paschi di Siena, regarded as Europe’s most troubled large bank, was up 0.6 per cent while UniCredit was down 0.8 per cent after falling by more than 5 per cent in opening trading. The FTSE MIB was up 1.42 per cent, after having fallen more than 1 per cent in earlier trading.
Italian banks, which have lost nearly half of their stock market value this year because of rising concerns over their stability, had rallied last week ahead of the referendum, with analysts suggesting a No vote had been largely priced in. Final results released on Monday morning showed Italian voters had rejected the reforms by 59-41 per cent, far more emphatically than opinion polls had suggested and catapulting political risk in Europe back to the centre of investors’ radars.
