Markets braced for Italy result

Outgoing Italian prime minister Mario Monti. Investors are awaiting the outcome of an Italian election that could trigger a sell-off in stocks and bonds.

Outgoing Italian prime minister Mario Monti. Investors are awaiting the outcome of an Italian election that could trigger a sell-off in stocks and bonds.

Mon, Feb 25, 2013, 00:00

Investors are awaiting the outcome of an Italian election that could trigger a sell-off in stocks and bonds and renew concerns about the euro if the polls bring an unstable government.

Opinion polls have suggested the centre-left Democratic Party (PD) of Pierluigi Bersani could secure a narrow victory in the recession-hit country.

But the rise of anti-establishment comedian Beppe Grillo's 5-Star Movement and the impressive comeback of centre-right leader Silvio Berlusconi have cast doubt over Mr Bersani's ability to govern even if he forms a coalition with the centrist party of outgoing technocrat prime minister Mario Monti.

Stock gains in Asia helped lift the future contract on Italy's benchmark 10-year BPT bond.

"Asian gains are providing support and some investors are already betting on a relief rally if the centre-left wins," a derivatives trader said.

"But it's too early to tell and we can expect nervousness to emerge at a debt sale later today."

The Italian stock market was expected to open higher on the back of stronger European index futures.

"The stock futures are positive but I don't expect anything significant on the Italian market until the exit polls come out," a Milan trader said.

By 08.03 GMT, the FTSEurofirst 300 was up 1.97 points, or 0.2 per cent at 1,167.55, in tandem with overnight gains in Asia and a bullish finish in the US on Friday.

The euro zone blue chip index climbed 1 per cent to around 2,656 points, extending its bounce off near three-month lows hit last Thursday.

Reuters

Sign In

Forgot Password?

Sign Up

The name that will appear beside your comments.

Have an account? Sign In

Forgot Password?

Please enter your email address so we can send you a link to reset your password.

Sign In or Sign Up

Thank you

You should receive instructions for resetting your password. When you have reset your password, you can Sign In.

Hello, .

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

Thank you for registering. Please check your email to verify your account.

We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.