European Markets Fall, Draghi Survives Confidence Vote but Coalition Breaks

Bridgette Randall
20 Jul, 2022
New York City

European markets traded higher after Italian Prime Minister Mario Draghi told lawmakers in the upper house of the parliament that he will continue to lead the nation if he wins the confidence vote. 

Later in the afternoon, Draghi won the confidence vote but three parties boycotted the vote. 

Despite Draghi's calls for unity earlier in the day, 5-Start Movement, Forza Italia, and League boycotted the election prompting stark rebuke from several leaders. 

"On this day of madness, Parliament decided to go against Italy," tweeted former Prime Minister Enrico Letta. 

Draghi is set to address lawmakers in the lower house of parliament tomorrow. 

Draghi's commitment to stay in the office comes at a crucial time for Italy as the nation needs to finalize its annual budget and pass reforms in the next few weeks ahead of receiving the next tranche of post-pandemic funding of 20 billion euros from the European Union. 

Last week, Draghi offered his resignation to Italian president after bickering coalition partner Five Star Movement pulled its support ahead of confidence vote, 

Draghi's resignation prompted a huge outpouring of public support urging him to stay in the office and lead the nation. Draghi was appointed in the office 17 months ago. 

The DAX index fell 0.2% to 13,281.98, the CAC-40 eased 0.3% to 6,184.66, and the FTSE 100 index dropped 0.44% to 7,264.31. 

Royal Mail Plc declined 1.8% to 279.87 pence after the U.K.-based mail service provider said fiscal first year revenues declined 11.5% from a year ago to 11.5 billion pounds. 

Group revenues, including GLS N.V., dropped 5.1% to 2.998 billion pounds. 

Parcels shipped in the June quarter declined 15% to 314 million from 371 million a year ago. 

ASML Holding NV gained 3.4% to 501.20 euros after the semiconductor equipment maker trimmed its fiscal full-year 2022 outlook.

Uniper SE increased 12.8% to 11.72 euros after the German utility is nearing an agreement to sell a stake to the German government in exchange for a bailout package.

The news was first reported by Bloomberg News and independently verified by Ticker.com   

Asian markets broadly closed higher on the receding worries that China's campaign against tech companies may be nearing end. 

The Nikkei index soared 2.7% to 27,680.27, the Hang Seng index added 1.1% to 20,890.22, and the Sensex index jumped 1.2% to 55,397.53. 

The People's Bank of China held its key lending rate for five-year loans at 4.45% as mortgage boycotts are spreading across the nation. 

The central bank lowered its rate by 15 basis points in May and by 5 basis points in January.