Italy’s stock market slides after uncertain election result

Italy's stock market slides after uncertain election result
Matteo Salvini, whose League party is now the dominant force in the right-wing coalition, in one of the biggest upsets of the vote. Photo: Piero Cruciatti/AFP
Italy's stock market slid on Monday following the country's unclear election outcome, underperforming Europe's other main indices which pushed higher as investors reacted also to progress on Germany's political front and US President Donald Trump's controversial tariff plans.

Around 1000 GMT, the FTSE MIB stocks index in Milan was down 1.0 percent.

A surge for populist and far-right parties in Italy's weekend election could result in a hung parliament with a right-wing alliance likely to win the most votes but no majority.

The anti-establishment Five Star Movement and the far-right euro-sceptic League party were the big winners of the election, which laid bare widespread anger over immigration and frustration with mainstream politics.

Elsewhere in European trading, Germany's DAX 30 index rose 0.8 percent as investors breathed easier on news of the country's coalition agreement, while in Paris the CAC 40 won 0.4 percent.

Over the weekend, German Chancellor Angela Merkel vowed to work with the Social Democrats for the “good of Germany” as the centre-left party agreed to join her new coalition.

Outside the eurozone, London's benchmark FTSE 100 index climbed 0.4 percent compared with the closing level on Friday.

In foreign exchange, the euro and pound rose versus the dollar, which was down also against the yen.

Regarding Italy meanwhile, “the complexity of the Italian voting system makes it very difficult to establish what happens next and when, but neither of the anti-establishment… parties are an attractive option for markets or the euro”, said Rebecca O'Keeffe, head of investment at Interactive Investor.

“Against this negative backdrop, investors can only be grateful that German coalition talks finally reached a conclusion, with Angela Merkel managing to hold on to her position as long-serving chancellor, albeit in a fragile alliance,” she added.