The Latest: Italy’s stock market drops after election result – Financial Post

ROME — The Latest on Italy’s parliamentary election (all times local):

11:55 a.m.

Italy’s stock market is down after populist and stridently anti-European Union political forces did well in Sunday’s parliamentary election, though no single group got enough support to govern alone.

The FTSE MIB index in Milan was down 1.2 per cent, on a day when global markets were trading higher.

Analysts say the strong showing by the anti-establishment 5-Star Movement and the rightwing League party means it’s less likely the next Italian government will try to make the economy more pro-business. It is more likely to increase government spending, which could help growth but could also add to public debt, which is already above a worryingly high 130 per cent of GDP.

Jane Foley, head of foreign exchange strategy at Rabobank International, said Monday “there are clear negative implications for the eurozone from the election result. At the very least, the political environment suggests that the progress of any structural reform in Italy will be difficult.”

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11:40 a.m.

Matteo Salvini, the leader of Italy’s anti-migrant euroskeptic League party, says the centre-right bloc has won “the right and the duty to govern” Italy.

Salvini said Monday the result indicates a centre-right bloc will lead the next government and that his party had would lead the centre-right, after eclipsing centre-right ally partner Silvio Berlusconi’s Forza Italia in the vote.

The League jumped from 4 per cent of the vote five years ago to nearly 18 per cent in Sunday’s vote, ahead of Forza Italia, which had nearly 14 per cent.

Salvini also indicated he was not interested in what he called “strange coalitions,” such as having the League join in a government with the populist 5-Star Movement.

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9:25 a.m.

French far-right leader Marine Le Pen is celebrating the strong showing of the anti-immigrant, euroskeptic League party in Italy’s election.

Le Pen, the runnerup in last year’s French presidential election and a loud critic of the European Union, tweeted Monday: “The spectacular advance and top showing of the League coalition led by our ally and friend Matteo Salvini is a new stage in the awakening of the people!” Le Pen didn’t mention the strong showing of the League’s rival, the 5-Star movement.

As the initial results came in, Le Pen also tweeted, “The European Union is having a bad evening….”

Le Pen’s National Front party has lost steam and been in crisis since her crushing presidential defeat by pro-European centrist Emmanuel Macron.

Macron didn’t immediately comment on the Italian result.

Alexis Corbiere of the far-left Defiant France party said Monday on BFM television, “There is a deep wish for change in Europe. If a progressive, civic-minded force doesn’t take the lead, you will manufacture monsters.”

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8:20 a.m.

Preliminary results released by Italy’s interior ministry show the centre-right coalition winning about 37 per cent of the parliamentary vote and the 5-Star Movement getting about 31 per cent, with the centre-left coalition far behind with 23 per cent.

With no faction winning a clear majority, the results early Monday confirm that negotiations to form a government that can win a confidence vote in Parliament will likely be long and fraught.

The partial results show the right-wing, anti-immigrant and euroskeptic League party of Matteo Salvini surpassing the establishment Forza Italia party of ex-Premier Silvio Berlusconi. The League captured around 18 per cent, while Forza Italia had less than 14 per cent.

The results confirm the defeat of the two main political forces that have dominated Italian politics — Forza Italia and the centre-left.

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