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| Version 2 | Version 3 |
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| Markets fall on fear of Italy post-election deadlock | Markets fall on fear of Italy post-election deadlock |
| (about 1 hour later) | |
| Markets have fallen in anticipation of political deadlock in Italy following parliamentary elections there. | Markets have fallen in anticipation of political deadlock in Italy following parliamentary elections there. |
| Exit polls suggest the centre-left has won a lower house majority, while early count data gave Silvio Berlusconi's centre-right the lead in the Senate. | Exit polls suggest the centre-left has won a lower house majority, while early count data gave Silvio Berlusconi's centre-right the lead in the Senate. |
| Global bank shares, the euro, and Italy's bond and stock markets fell back on fear the results may unleash new financial stress in the eurozone. | |
| Mr Berlusconi quit as Prime Minister in 2011 amid a major financial crisis. | Mr Berlusconi quit as Prime Minister in 2011 amid a major financial crisis. |
| At the time, markets had lost confidence in his ability to push through spending cuts and difficult labour market reforms deemed necessary to revive Italy's economy. | At the time, markets had lost confidence in his ability to push through spending cuts and difficult labour market reforms deemed necessary to revive Italy's economy. |
| The Rome government was faced with spiralling borrowing costs in the bond markets, while the country's banks were forced to turn to the European Central Bank for emergency loans. | The Rome government was faced with spiralling borrowing costs in the bond markets, while the country's banks were forced to turn to the European Central Bank for emergency loans. |
| The elections follow the end of the caretaker premiership of technocratic Prime Minister Mario Monti, who took over from Mr Berlusconi and pushed through a plethora of unpopular economic reforms, that helped regain the markets' trust. | The elections follow the end of the caretaker premiership of technocratic Prime Minister Mario Monti, who took over from Mr Berlusconi and pushed through a plethora of unpopular economic reforms, that helped regain the markets' trust. |
| Deadlock concerns | Deadlock concerns |
| The Milan bourse, which had been up 4% for the day in mid-afternoon trading, gave up its gains as the early Senate results came through, ending the day only 0.7% higher. | The Milan bourse, which had been up 4% for the day in mid-afternoon trading, gave up its gains as the early Senate results came through, ending the day only 0.7% higher. |
| Italian bank stocks, which had surged more than 7% on hopes of a stable centre-left coalition government under Pier Luigi Bersani, also gave up most of their gains. | Italian bank stocks, which had surged more than 7% on hopes of a stable centre-left coalition government under Pier Luigi Bersani, also gave up most of their gains. |
| The negative tone continued into US trading hours, with the Dow Jones falling steadily from mid-morning, to finish the day 1.6% lower. | The negative tone continued into US trading hours, with the Dow Jones falling steadily from mid-morning, to finish the day 1.6% lower. |
| US banks were also badly hit by concern that a failure by the new Italian government to get to grips with the country's heavy debt burden could lead to renewed stress in the international banking system. | US banks were also badly hit by concern that a failure by the new Italian government to get to grips with the country's heavy debt burden could lead to renewed stress in the international banking system. |
| Morgan Stanley fell 6.6%, Citigroup 3.8%, Bank of America 3.6% and JP Morgan 2.5%. | Morgan Stanley fell 6.6%, Citigroup 3.8%, Bank of America 3.6% and JP Morgan 2.5%. |
| On the bond markets, Italy's cost of borrowing ended Monday fractionally higher at 4.49% per year, from 4.33% at the end of Friday, as the perceived riskiness of lending to the government rose. | On the bond markets, Italy's cost of borrowing ended Monday fractionally higher at 4.49% per year, from 4.33% at the end of Friday, as the perceived riskiness of lending to the government rose. |
| The implied yearly cost of borrowing had fallen to 4.17% at one point, before news of the Senate results arrived. | The implied yearly cost of borrowing had fallen to 4.17% at one point, before news of the Senate results arrived. |
| Meanwhile, on the currency markets, the euro - which had gained a cent against the dollar to $1.33 at one point - fell back again to $1.306, as hopes for greater political stability evaporated. | Meanwhile, on the currency markets, the euro - which had gained a cent against the dollar to $1.33 at one point - fell back again to $1.306, as hopes for greater political stability evaporated. |