Italian stocks fell the most in ten months as the country’s inconclusive parliamentary elections signaled voters are tiring of austerity.
UniCredit SpA and Intesa Sanpaolo SpA, the nation’s biggest banks, slumped at least 8.5 percent. Assicurazioni Generali SpA, the country’s largest insurer, sank 6.5 percent, while Telecom Italia SpA, the biggest phone company in Italy, dropped to a 15-year low.
The FTSE MIB Index tumbled 4.9 percent to 15,552.2 at the close in Milan, its largest decline since April 10. The volume of shares changing hands was 41 percent greater than the average of the last 30 days, according to data compiled by Bloomberg. The equity benchmark has lost 3.4 percent this year.
“Investors are a bit dismayed that the hopeful Mario Monti did so poorly and won only about 10 percent of the vote,” said Christian Zogg, who manages about $540 million as head of equity and fixed income at LLB Asset Management AG in Vaduz. “There’s fear that Italy will stray from the chosen path of virtue and that the recent reforms will be discarded. In the mid-term, now is a good buying opportunity for equities.”
Pre-election favorite Pier Luigi Bersani won the lower house by less than a half a point in the poll over the past two days. Silvio Berlusconi, the former premier fighting a tax-fraud conviction and charges of paying a minor for sex, won a blocking minority in the Senate. In its first national contest, Beppe Grillo’s Five Star Movement obtained 25 percent of votes for the Chamber of Deputies. An Italian government needs a majority in both houses.
Berlusconi and Grillo, the candidates who pledged to reverse the austerity implemented by outgoing Premier Mario Monti to contain the region’s financial crisis, won about 55 percent of the popular vote. The result may lead President Giorgio Napolitano to install an interim government to write a new election law before calling another round of elections.
Berlusconi acknowledged Bersani’s narrow victory in the lower house of Parliament and said he’s open to a broad alliance to avoid a second election.
“Everyone needs to think what good can be done for Italy and this will take some time,” Berlusconi said in an interview with Canale 5, a station owned by his Mediaset SpA broadcaster. The country cannot be left without a government, he said.
Government bonds fell, pushing yields on 10-year Italian debt 40 basis points higher to 4.89 percent.
The Italian market regulator, Consob, banned short selling of Banca Carige SpA and Intesa Sanpaolo for today and tomorrow.
Italian banks tumbled, with UniCredit, the nation’s biggest lender, sliding 8.5 percent to 3.83 euros, and Intesa Sanpaolo, the second-largest, slumping 9.1 percent to 1.23 euros. Banca Popolare di Milano Scarl fell 5.7 percent to 51.9 euro cents.
The FTSE Italia All-Share Banks Index dropped 8.4 percent, its biggest decline since August. Generali fell 84 euro cents to 12.01 euros, the lowest price since October.
Mediolanum SpA, the Italian financial-services company partly owned by Berlusconi, plunged 10 percent to 4.12 euros. Mediaset, the broadcaster controlled by the former prime minister, sank 5.6 percent to 1.62 euros.
Telecom Italia dropped 7.3 percent to 54.9 euro cents, its lowest price since August 1997. Kepler Capital Markets said the company’s refinancing strategy remains at risk.
Enel SpA, Italy’s biggest utility, and Eni SpA, the nation’s largest oil company, declined 5.8 percent to 2.71 euros and 3 percent to 17.01 euros, respectively.