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European stocks fall on Spain, Italy news
Spain Prime Minister faces calls to resign from opposition debated reported about illegal payments, after reports in local newspapers that he or members of his People’s Party received illegal payments. Rajoy replied that the allegations are unfounded and sprung from people trying to damage his party.
In response, 10-year Spanish bond yields jumped to 5.32%, the highest in seven weeks earlier today in Madrid.
Italy’s benchmark 10-year bond yields climbed 7 basis points to 4.4%, after a poll conducted on February 1 showed the media tycoon Silvio Berlusconi narrowed the gap with leader Pier Luigi Bersani to 5 percentage points.
The rise by the former three-time minister came after he pledged to refund a tax on primary residencies imposed by Prime Minister Mario Monti, the successor of Berlusconi who was pressured to leave the office in 2011.
“Berlusconi wants to buy the votes of Italians with the money that Italians had to turn over to cover up the shortfall left in the public accounts by Berlusconi, who governed for eight of the past 10 years,” Monti said.
Accordingly, European stock equities dipped from its highest levels in around two years. Europe`s STOXX 600 lost 0.23% to 287.55, while the STOXX 50 dropped 0.82% to 2687.82.
As of 11:50 GMT, the British FTSE 100 dropped 0.61% to 6,308.62 points; French CAC40 slipped 0.74% to 3,745.75 points, and the German DAX edged lower by 0.43% to 7,799.94 points.
The euro reversed its four-day gain versus the U.S. dollar after reaching a 14-month high. Meanwhile, the pair is trading around 1.3562, after opening at 1.3651, while setting a session low of 1.3555 and a high of 1.3657.