Italian stocks erased earlier gains, after projections showed Silvio Berlusconi’s coalition led in the election for the Italian Senate, spurring concerns about the prospects of a stable government.
The FTSE MIB Index (FTSEMIB) rose 0.6 percent, reducing earlier gains of as much as 4 percent, to 16,332.41 as of 5:25 p.m.
“Preliminary results are leading to the worse scenario for investors, an unstable government,” said Vincenzo Longo, a Milan-based strategist at IG Markets. “Projections show Berlusconi is winning the Senate, while polls indicate Bersani will win the lower house. That means un-governability.”
Berlusconi’s bloc probably captured 31.3 percent votes in Senate, compared with a 30.1 percent of Pierluigi Bersani’s PD coalition, according to projections of RAI. Previous polls showed Pier Luigi Bersani’s center-left alliance probably captured a majority of 340 seats in the lower house, the Chamber of Deputies, according to a SkyTG24 poll.
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