Italy's FTSE MIB Extends Losses in Early Trading as Banks Tumble

By Liam Moloney

ROME--Milan's FTSE Mib posts strong losses in early trading Thursday as the rout of bank stocks seen earlier in the week returned, causing a raft of trading suspensions.

"There's a lot of volatility out there on concern over the growth of the global economies and financial companies are taking the brunt," said a trader in Milan.

FTSE Mib was down 5% at 15893, returning to 2013 lows, at 0918 GMT.

UBI fell 17%, before being temporarily suspended, after reporting lower-than-expected earnings, especially for net interest income.

Mediobanca shares were also temporarily suspended, down 9.6%, after reporting lower second-quarter net profit.

UniCredit shares are also suspended after falling 7.4%

Banca Monte dei Paschi di Siena and Intesa Sanpaolo slid 6.5% and 5.9% respectively.

After having lost in some cases more than 40% of their market value since the beginning of the year, Italian banking stocks staged a rebound on Wednesday.

In late January, the Italian government struck an agreement with the European Union over a mechanism to deal with the high level of bad loans in the country's banks, which late Wednesday it approved as national law.

There is concern the mechanism will mean banks will suffer losses if they adhere to it as it will mean pricing the debt at market value.

Latest figures from the Bank of Italy showed bad loans at Italian banks are persistently high, including those net of banks' provisions.

Giovanni Legorano contributed to this article.

Write to Liam Moloney at [e-mail]

(END) Dow Jones Newswires

February 11, 2016 04:54 ET (09:54 GMT)

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