April 30, 2020 / 12:15 PM / a month ago

Italian bond yields rise, bank stocks fall after no big move from ECB

LONDON, April 30 (Reuters) - Italy’s government bond yields rose and euro zone shares accelerated losses after the European Central Bank held off from big moves at its policy meeting on Thursday.

The ECB kept much of its remaining powder dry, reaffirming its already vast bond purchase scheme but holding back on any big policy action for now.

Italian 10-year bond yields rose as much as 8 basis points on the day following the decision. They were last up 2 bps at 1.79%.

Safe-haven German 10-year bond yields extended their fall to -0.54%, hitting a fresh one-month low, last down 5 bps on the day.

The gap between Italy and Germany’s 10-year bond yield - effectively the risk premium Italy pays on its debt - widened to as much as 236 bps, a new high since Friday’s S&P Italy rating review.

Euro zone shares accelerated their losses after the announcement and banks, which were already battered by disappointing results, underperformed. They lost an additional 2% and touched their lowest level of the session with a fall of 5.3%.

The euro was little changed, hovering around $1.0871 . (Reporting by the London Markets Team; writing by Yoruk Bahceli; Editing by Dhara Ranasinghe)

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