Investors Still Don’t Seem Fazed by Italy’s Election

Investors brush off political risk as FTSE MIB outperforms
Lack of concern may cause violent reaction in negative outcome

Vistors exit the Borsa Italiana, Italy's stock exchange, which is part of the London Stock Exchange Group Plc, in Milan, Italy, on Thursday, Jan. 17, 2013. The euro-area economy won't return to growth until the next quarter as a recovery in Italy is delayed and France continues to shrink, according to a survey of economists.Photographer: Alessia Pierdomenico

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By Aleksandra Gjorgievska and Chiara Remondini

February 27, 2018 at 5:00 AM UTC

Updated on

February 27, 2018 at 11:33 AM UTC

This article is for subscribers only.

European equities breezed through uncertain outcomes of votes in Germany and the Netherlands last year. Now, most investors are betting Italy’s March 4 parliamentary vote won’t be much different.

Even as possible results of the vote include a hung parliament and a strong showing by the euro-skeptic Five Star Movement, investors don’t seem to be panicking. They are encouraged by anti-establishment factions softening their anti-euro rhetoric and a new electoral law that steers parties toward building coalitions, threatening the Five Star’s go-it-alone approach. Italy’s FTSE MIB Index is up 3.8 percent this year, despite a global market rout which has sent the Stoxx 600 down 1.9 percent.