The Italian FTSE MIB has been taking a beating recently, despite a 1.60 per cent rally today.
Yesterday it got absolutely crushed, falling 4.98 per cent. Since the middle of last month, the index has fallen nearly 16 per cent.
The reason for this dive in stocks—even when Italy seems to be shaping up its fiscal policy—may be quite simple. There could be a huge Italian bank downgrade next week.
Morgan Stanley analysts estimated that Moody’s ratings reviews for Italian banks could come through the week of April 16. And Italy’s banking sector won’t be the only one about to face judgement from that ratings agency (via ZeroHedge):
Photo: Morgan Stanley via ZeroHedge