LONDON, Oct 19 (Reuters) - Italy’s government bond yields fell and its stock index rose on Friday after European Economic Affairs Commissioner Pierre Moscovici said he wanted to reduce tensions with Italy over the country’s contentious budget plans.
Two-year Italian bonds yields were last down 11 basis points on the day at 1.72 percent, having reversed earlier rises to almost five-month highs.
Ten-year yields were a touch lower at 3.67 percent , down from 4-1/2 year highs hit earlier.
Italy’s top stock index climbed into positive territory, trading up 0.4 percent after Moscovici’s comments. The bank stocks index also rapidly pared losses, last trading down just 0.2 percent. (Reporting by Dhara Ranasinghe and Helen Reid; Editing by Virginia Furness)