European stock markets
Italy political crisis hits European stock markets Share this with Facebook Image copyright ANDREAS SOLARO/AFP Image caption Former IMF official Carlo Cottarelli is now interim prime minister European shares have slumped over continuing political upheaval in Italy. The prospect of elections as early as September , with the prospect of eurosceptic parties strengthening their position, hit markets. Italy's benchmark FTSE MIB sank in morning trade, down 3%. The UK's FTSE was down 1.37%, Germany's Dax down 1.85%, and France's Cac down 2%. And the sell-off in Italian bonds deepened, with the yield on two-year debt breaking through the 2% barrier. The yield on the bond is set for its biggest one-day jump in 26 years. Movements in bond prices are important as they affect the cost of borrowing for the government. Italy's debt currently stands at 130% of its economic output. The bond sell-off hit the share price of Italian banks exposed to govern...