Closing post
Time to wrap up:
Italy has announced a one-off 40% windfall tax on local banks that have been accused of reaping billions in extra profit from rising interest rates.
The Italian government, which approved the surprise tax in a cabinet meeting on Monday night, said it planned to use the proceeds to support mortgage holders and cut taxes, at a time when rising rates have put extra pressure on households.
The decision, which analysts said could force banks to collectively give as much as €4.9bn (£4.2bn) to the state, sent bank shares plunging…
China’s imports and exports fell much faster than expected in July as weaker demand threatens recovery prospects in the world’s second-largest economy.
Imports dropped 12.4% in July year-on-year, while exports fell by 14.5%.
Here’s the rest of the main news today:
Italy's FTSE MIB closes down 2% as banks slide
Italy’s main stock index, the FTSE MIB, has closed for the night down over 2%.
The FTSE MIB shed 605 points, or 2.1%, to end the day at 27,942 points, as Rome’s new bank windfall tax rattles the markets.
Shares in Unicredit ended the day down 5.9%, while Italy’s largest bank, Intesa SanPaulo, has lost 8.5%.
In London, the FTSE 100 has closed 27 points or 0.36% lower, as the fall in China’s trade last month also hit stocks such as mining companies.
Michael Hewson of CMC Markets explains:
Despite the weakness in basic resources, the FTSE100 has managed to hold up rather well, unlike markets in Europe which have fallen sharply, with the banking sector there also under pressure after the Italian government whacked an unexpected 40% windfall tax on bank profits for this year, which it is estimated could raise an extra €2bn of revenue.
This move has precipitated similar weakness in German, Spanish and French banks over concerns that the move by Italy could be adopted Europe wide, with UniCredit, Deutsche Bank, Intesa, Santander, and Paribas all sharply lower.
