STOCK MARKET WATCH -- Thursday, 27 December 2012

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20. Italian December Business Confidence Rises After Recession Eases

http://www.bloomberg.com/news/2012-12-27/-.html

Italian business confidence rose for a second month after a recession eased in the third quarter and the nation’s borrowing costs declined.

The manufacturing-sentiment index increased to 88.9 in December from 88.5 the previous month, Rome-based national statistics institute Istat said today. Economists had predicted a reading of 88.8, according to the median of 12 estimates in a Bloomberg News survey. Separately, Italian borrowing costs stayed close to a two-year low at an auction of bills.

Italy’s economy shrank 0.2 percent in the three months through September, about a third of the contraction recorded in the previous quarter. Still, the country’s fourth recession since 2001 is now in its second year and this quarter is marked by a “very negative context,” business lobby Confindustria said in a report last month.

Confidence is “well short of the level required to herald an economic recovery in the first half of 2013,” said Raj Badiani, an economist at IHS Global Insight in London. While the improvement in the index indicates the economy is “entering a less punishing phase,” it offers “no hope of an emerging recovery phase.”