In Europe on Tuesday, the FTSE Eurofirst 300 dropped 1.2 percent to 1,367.27. Italian politics had more than a little to do with the day’s trade. Romano Prodi unseated Prime Minister Silvio Berlusconi but only by a narrow margin that left it unclear how many reforms the new parliament would be able to enact.
The Italian banking sector was down significantly in the wake of the election results. Unicredito dropped 3.8 percent to €5.83, while Banche Popolari Unite lost 3.5 percent to €19.48 and Mediobanca was down 3.4 percent to €17.23. Elsewhere, Swiss bank UBS lost 1.7 percent to SFr144.10 after it said it would buy Piper Jaffray’s private client branch network, paying $500 million cash for the acquisition. The loss came even though analysts said the purchase was a good one for UBS.
Despite his loss in the Italian election, Silvio Berlusconi’s day wasn’t completely a loss. His Mediaset broadcasting company added 1.1 percent to €10.17 as analysts said its shares were trading at a discount. Bear Stearns reiterated its “outperform” rating and target share price, set at €12.
Shares in companies that must purchase fuel were down as crude oil prices again were up. Ryanair declined by 2 percent to €7.38, while Lufthansa dropped 3.2 percent to €14.33 even though it reported an 0.4 percent rise in traffic.
In the telecommunications sector, the largest maker of telecom equipment, Nokia, added 3.7 percent to €17.60 after it announced that first-quarter handset prices had gone up to €103, above its forecast of €99 or less. Before the report was released, Dresdner Kelinwort Wasserstein had reiterated its “sell” recommendation on the stock predicted a lower selling price for handsets and consequent limits to revenue growth in the quarter.