Hung Parliament in Italy After Elections, European Markets Drop

Nigel Thomas
26 Feb, 2013
New York City

European markets declined after fears of euro zone crisis resurfaced. Italian general election led to a hung parliament as voters reject austerity of 15 months under Prime Minister Mario Monti.

[R]4:00 PM Frankfurt – European markets declined after fears of euro zone crisis resurfaced. Italian general election led to a hung parliament as voters reject austerity of 15 months under Prime Minister Mario Monti.[/R]

Results of Italian elections reverberated around the world as investors rekindled the fears of euro zone crisis.

Italian political stalemate is likely to continue as voters rejected 15 months of austerity under Prime Minister Mario Monti and failed to elect a clear winner.

Pier Luigi Bersani won the lower house with 29.5% followed closely by 29.1% votes by a coalition controlled by ex-premier Silvio Berlusconi.

In a four-way race, Italian voters also showed enthusiasm for the policies promoted by a former comedian Beppe Grilo with 25.6% of votes and Mario Monti winning the least with 10.6% of votes, according to the final data provided by the Interior Ministry.

Bersani led coalition also won 31.6% votes in the Senate, compared to 30.7% won by the Berlusconi led coalition.

The euro strengthened 0.1% to $1.307 and Italy completed the sale of 8.75 billion of six-month bills today at an average yield of 1.237%, up from 0.731% yield at the last month auction.

The 10-year bond yield after the auction increased to 4.77%.

In London trading, FTSE 100 index slumped 1.2% or 78.8 to 6,277 and in Frankfurt, the DAX index declined 1.4% or 111.4 to 7,662. In Paris, CAC 40 index dropped 1.8% or 67.9 to 3,653.

Market indexes in Milan declined as much as 4.6% and closed down 4.06% and in Madrid dropped as much as 3.2% but recovered to close down 2.26%.

Stocks in Review

BASF SE dropped 2.7% to €157.15 after Germany based chemical maker reported sales for the fourth quarter ending in December jumped 8.7% to €19.65 billion from €18.07 billion from a year ago.

Net income for the quarter declined 13.4% to €980 million compared to €1.13 billion and earnings per share dropped €1.06 from €1.23 from a year ago.

For the year, sales climbed 7.1% to €78.73 billion compared to €73.50 billion from a year ago. Net income for the year plunged 21.2% to €4.88 billion from €6.19 billion and earnings per share declined €5.31 from €6.74 from a year ago.

Pandora A/S climbed 2.2% to DKK146.70 based jewelry maker announced its plan to buy back 700 million kroner of shares this year.

The jewelry maker expects revenue for the 2013 above 7.2 billion kroner and EBITDA margin to grow above 25%.

Vivendi SA slid 0.1% to €157.15 after France based telecommunications service provider said revenue for the fiscal year ending in December rose 0.6% to €28.99 billion from €28.81 billion from a year ago.

Earnings for the year tumbled 93.9% to €164 million compared to €2.68 billion from and diluted earnings per share plunged 94.1% to €0.12 from €2.09 a year ago period.

For the fourth quarter, revenue jumped 8.6% to €3.77 billion from €3.47 billion from a year ago period. Net loss for the quarter widened to €1.49 billion compared to €118 million and diluted earnings per share to €1.12 from €0.09 a year ago period.

For 2013, SFR expects EBITDA close to €2.9 billion and capex around €1.6 billion.

Whitbread Plc declined 3.4% to 2,474 pence after the hotels and restaurant operator reported sales as of February 14. The company said during the fourth quarter, total sales climbed 16.9% and total sales surged 14.8% for the fifty week ended February 14.