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Markets shiver but don't catch cold over Italian political turmoil

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By Euronews  with REUTERS
Markets shiver but don't catch cold over Italian political turmoil

<p>European shares rose more than 1 percent on Monday as investors bet against an immediate snap election in Italy following Prime Minister Matteo Renzi’s resignation.</p> <p>Markets were a little edgy at the opening – the Milan stock exchange fell as much as 2 percent – but most investors don’t expect the country will leave the euro zone.</p> <p>“Italy is systemically important, the Eurozone cannot survive without Italy, there’s no speculation about that,” said Robert Halver, head of market research at Baader Bank.</p> <p>Germany’s <span class="caps">DAX</span> and Europe’s FTSEuroFirst index of top 300 shares both rose 1.5 percent. Wall Street was expected to open up 0.5 percent.</p> <p>“Our base scenario is a caretaker (Italian) government which could be in place before Christmas, and no new elections before 2018,” Indosuez Wealth Management chief economist Marie Owens Thomsen said.</p> <p>Markets have been jolted by the scale of Renzi’s defeat, fearing further political turmoil in the euro zone’s third-largest economy.</p> <p>All eyes are now on Italy’s heavy debt and fragile lenders. Banking shares fell more than 4 percent in morning trading, but later reverted their losses.</p>