Italy hit by market volatility after referendum defeat

MILAN – Italy was plunged into political and economic uncertainty following voters’ resounding rebuke of Premier Matteo Renzi’s proposed constitutional reforms.

Renzi announced he would quit following Sunday’s referendum vote, in which 60 per cent of voters rejected his reforms and signalled they wanted a change in political direction. Renzi is expected to hand in his resignation to President Sergio Mattarella later Monday.

The Milan Stock Exchange opened down 2 per cent, but many bank shares were suspended due to excessive volatility meaning the hit could be even deeper.

The results hit Italy’s sovereign debt, increasing the spread on Italy’s 10-year bonds to 2 per cent, from 1.7 per cent on Dec. 1 and a record low of just over 1 per cent last March and April.

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