Italian Stock Market Suffers Significant Losses Amid Rising Trade Tensions
The FTSE MIB index falls sharply by over 6%, while Bank of Italy revises GDP growth forecasts downward.
The Italian stock market experienced a dramatic decline, with the FTSE MIB index closing down 6.53% at 34,649 points, following a drop of more than 7% during trading hours.
This marked one of the steepest losses in recent history; however, it did not surpass the record decline of 16.92% witnessed on March 12, 2020, immediately following Italy's first national lockdown due to the COVID-19 pandemic.
Other historical downturns of note include a 12.48% drop on June 24, 2016, after the Brexit referendum, and a 10% decline on October 20, 1987, known as 'Black Tuesday'.
The current market slump, attributed in part to renewed fears over U.S. tariffs, places it within the context of significant past market events, including a 7.57% loss on September 11, 2001, due to the terrorist attacks in the United States.
Amid these market shifts, the Bank of Italy has revised its growth forecasts for the Italian economy, now projecting a GDP increase of just 0.6% in 2025, a downward adjustment from a previous estimate of 0.8%.
The anticipated growth for 2026 has also been lowered from 1.1% to 0.8%, and for 2027 from 0.9% to 0.7%.
The central bank cited the escalation of trade policies as a major factor influencing these revisions.
The estimates, which are based on seasonally adjusted data, suggest that without adjustments for working days, growth would be marginally higher at 0.5% in 2025, 0.9% in 2026, and 0.7% in 2027. Notably, the stances do account for a preliminary assessment of tariffs but do not include potential retaliatory measures or the impacts on international markets.
Regarding inflation, the Bank of Italy forecasts a stable rate at around 1.5% for 2025 and 2026, with a slight increase to 2% anticipated in 2027. The central bank noted that core inflation could face upward pressures from potential retaliatory tariffs imposed by the European Union, but a significant downturn in demand could offset such effects.
European stock markets also reported substantial declines, with Paris plummeting by 4.2%, driven by significant losses among banking shares, particularly Societe Generale, which saw a decline of 10.4%.
Frankfurt's index fell 4.7%, weighed down by declines in the banking, retail, and automotive sectors.
London and Madrid saw drops of 4.9% and 5.8%, respectively.
On the British market, BP shares fell by 7.4% amid concerns over declining oil prices and the resignation of its chairman, Helge Lund, who announced the initiation of a search for a successor.
In Paris, Scor Re was down 10.4% following scrutiny from French authorities related to a judicial investigation concerning its former president’s acquisition activities.
Conversely, OVHcloud shares surged by 19.6%, as investors speculated on potential benefits from a European Union initiative to increase taxes on U.S. digital services.
Asian markets followed suit with significant losses, largely influenced by Wall Street’s downturn.
Japan’s Nikkei index dropped 2.75%, hitting an eight-month low.
Other markets reported decreases, with Seoul down 0.86%, Mumbai falling 1%, Hanoi losing 3.75%, and Bangkok dropping 2.6%.
The declines were amid ongoing concerns about the implications of U.S. trade policies, with investors wary of a possible global recession.
In contrast, the Moscow Exchange recorded gains, with a rise of 1.76%.
The Russian stock market remained unaffected by the latest U.S. tariffs, as the country is not included in the new measures attributed to ongoing geopolitical issues.
The exclusion is based on existing U.S. sanctions, which, according to the White House, already restrict meaningful trade with Russia.
This marked one of the steepest losses in recent history; however, it did not surpass the record decline of 16.92% witnessed on March 12, 2020, immediately following Italy's first national lockdown due to the COVID-19 pandemic.
Other historical downturns of note include a 12.48% drop on June 24, 2016, after the Brexit referendum, and a 10% decline on October 20, 1987, known as 'Black Tuesday'.
The current market slump, attributed in part to renewed fears over U.S. tariffs, places it within the context of significant past market events, including a 7.57% loss on September 11, 2001, due to the terrorist attacks in the United States.
Amid these market shifts, the Bank of Italy has revised its growth forecasts for the Italian economy, now projecting a GDP increase of just 0.6% in 2025, a downward adjustment from a previous estimate of 0.8%.
The anticipated growth for 2026 has also been lowered from 1.1% to 0.8%, and for 2027 from 0.9% to 0.7%.
The central bank cited the escalation of trade policies as a major factor influencing these revisions.
The estimates, which are based on seasonally adjusted data, suggest that without adjustments for working days, growth would be marginally higher at 0.5% in 2025, 0.9% in 2026, and 0.7% in 2027. Notably, the stances do account for a preliminary assessment of tariffs but do not include potential retaliatory measures or the impacts on international markets.
Regarding inflation, the Bank of Italy forecasts a stable rate at around 1.5% for 2025 and 2026, with a slight increase to 2% anticipated in 2027. The central bank noted that core inflation could face upward pressures from potential retaliatory tariffs imposed by the European Union, but a significant downturn in demand could offset such effects.
European stock markets also reported substantial declines, with Paris plummeting by 4.2%, driven by significant losses among banking shares, particularly Societe Generale, which saw a decline of 10.4%.
Frankfurt's index fell 4.7%, weighed down by declines in the banking, retail, and automotive sectors.
London and Madrid saw drops of 4.9% and 5.8%, respectively.
On the British market, BP shares fell by 7.4% amid concerns over declining oil prices and the resignation of its chairman, Helge Lund, who announced the initiation of a search for a successor.
In Paris, Scor Re was down 10.4% following scrutiny from French authorities related to a judicial investigation concerning its former president’s acquisition activities.
Conversely, OVHcloud shares surged by 19.6%, as investors speculated on potential benefits from a European Union initiative to increase taxes on U.S. digital services.
Asian markets followed suit with significant losses, largely influenced by Wall Street’s downturn.
Japan’s Nikkei index dropped 2.75%, hitting an eight-month low.
Other markets reported decreases, with Seoul down 0.86%, Mumbai falling 1%, Hanoi losing 3.75%, and Bangkok dropping 2.6%.
The declines were amid ongoing concerns about the implications of U.S. trade policies, with investors wary of a possible global recession.
In contrast, the Moscow Exchange recorded gains, with a rise of 1.76%.
The Russian stock market remained unaffected by the latest U.S. tariffs, as the country is not included in the new measures attributed to ongoing geopolitical issues.
The exclusion is based on existing U.S. sanctions, which, according to the White House, already restrict meaningful trade with Russia.
Translation:
•
Translated by AI
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
