Worsening Italian crisis batters financial markets

Italy gridlock shakes up global markets

Italy gridlock shakes up global markets

Officially he is due to announce his government today after leaving his meeting yesterday with president Sergio Mattarella without making a comment.

Investors dumped Italian government bonds, driving borrowing costs sharply higher for the country and rekindling fears of more financial strain for Europe's third-largest economy.

Following the slump of European stocks, United States and Asian markets have sunk amid fears over the future of the euro fueled by political anxiety in Italy.

MSCI's broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS tumbled 1.4 percent, while Japan's Nikkei average .N225 sold off 1.5 percent to a six-week low.

Investers are concerned that the anti-austerity, eurosceptic 5 Star and League could increase their majority at the next election.

On Wall Street, the Dow Jones Industrial Average fell 1.58 percent to 24,361.45, the S&P 500 lost 1.16 percent to 2,689.86 and the Nasdaq Composite dropped 0.5 percent to 7,396.59.

Flood watch issued in South Florida for all of Memorial Day weekend
The NHC predicted 10 inches to 15 inches of rain with isolated totals of 25 inches in the Yucatan Peninsula and western Cuba. Subtropical storms, like Alberto, can develop into tropical storms, which can ultimately strengthen into hurricanes.

Chinese shares also headed south, with the Shanghai Composite index .SSEC down 1.4 percent.

Short-dated Italian bond yields IT2YT=RR - a sensitive gauge of political risk - soared 1.5 percentage points from Monday to their highest since 2013 in their biggest move in almost 26 years.

The political crisis in Rome, and the threat to the euro project it represents, triggered a rush to traditional safe havens like USA debt, pulling down US 10-year Treasury yields and in turn spurring losses for USA banks.

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Shares of energy companies were also led lower by a drop in US crude oil futures on expectations that Saudi Arabia and Russian Federation could pump more crude to compensate for a potential supply shortfall.

But in the past week, the country's politics took on a new level of unpredictability. It dropped 1.7 per cent to $66.73 a barrel in NY.

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