Europe markets sanguine about Italian referendum defeat

London

ITALY began the week with the threat of expectations of an election and a banking crisis, following the government's referendum defeat. Instead, after an initial plunge, banking stocks, government bonds and the euro revived on hopes that the European Central Bank (ECB) would come to the rescue.

Initial fears of Italian political and economic difficulties were unsurprising. Matteo Renzi had announced his resignation as Italian prime minister, following a referendum vote that rejected, by a sizeable margin, the government's attempts to alter the Constitution.