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While you were sleeping: Parliament split for Italy?
Posted By admin On February 26, 2013 @ 7:41 am In Article | Comments Disabled
Article – BusinessDesk
Feb 26 (BusinessDesk) Wall Street declined amid early indications that the outcome of Italian elections calls into question the European Union’s ability to lift itself from the sovereign debt crisis and recession.
Feb 26 (BusinessDesk) – Wall Street declined amid early indications that the outcome of Italian elections calls into question the European Union’s ability to lift itself from the sovereign debt crisis and recession.
Polls indicate that the vote in Italy, the euro-zone’s third-largest economy, may have left the country with a split parliament. As Pier Luigi Bersani’s centre-left coalition won control of the lower house, former prime minister Silvio Berlusconi’s party looked set to take the senate, which might jeopardise austerity efforts.
“What we don’t want to hear is a renewed fear about a euro-zone fracture,” Art Hogan, managing director of Lazard Capital Markets in New York, told Reuters.
In afternoon trading in New York, the Dow Jones Industrial Average fell 0.14 percent and the Standard & Poor’s 500 Index slid 0.29 percent. The Nasdaq Composite Index gained 0.15 percent.
Europe’s Stoxx 600 Index ended the session with a decline of nearly 0.1 percent, though the region’s national benchmark indexes advanced as markets earlier welcomed Bersani’s lower house victory on initial exit poll results.
The UK’s FTSE 100 gained 0.3 percent as investors shrugged off Moody’s decision, announced late Friday, to strip the nation of its top credit rating.
France’s CAC 40 rose 0.4 percent, Germany’s DAX advanced 1.5 percent, and Italy’s key index climbed 0.7 percent—though at one point in the session it was 4 percent higher.
Signs of a potential Berlusconi grip on the senate accelerated after the markets closed. The euro gave up earlier gains of as much as 1 percent against the greenback, last trading 0.1 percent weaker at US$1.3176, while the yield of Italy’s benchmark 10-year bond climbed four basis points to 4.49 percent, after earlier dropping as much as 28 basis points.
“The lower house is probably going to end in the centre-left but the senate is a close call and what we are seeing in the latest polls is that Berlusconi is doing better,” Nicola Marinelli, who oversees US$180 million at Glendevon King Asset Management in London, told Bloomberg News.
“With no one having a majority there is going to be a lot of negotiations and it is not going to be a stable and strong government. When the first exit polls came out, Italian bonds pushed higher, but with the latest numbers everything is reversing rapidly.”
In other news, shares of Chesapeake Energy sank, last down 5.2 percent, after the company agreed to sell a stake in an Oklahoma oilfield to China Petrochemical for less than one-third of its estimated value.
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