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Italy's markets recover amid calmer political waters

Italy's stock exchange has opened sharply higher following the formation of a new government in the country.
As three months of political deadlock looked set to end, Italian stocks rose by 2.6%, leading the European pack.
Banks were the stand-out performers, up 3.6%.Other European stocks also felt the effects of Italy's increasing political calm.The pan-European STOXX 600 index rose 0.5% in early trading, while German stocks gained 0.8% and the FTSE 100 rose 0.7%.On 4 March, Italy's election resulted in stalemate, with no party or bloc winning a majority.The uncertainty had battered Italy's stocks, resulting in a slide of more than 9% in May - the worst month since 2016.But after Italy's anti-establishment parties 5-Star Movement and the League revived prospects of a coalition, the risk of a second election was removed.:: Who is Giuseppe Conte?
Italy's markets recover amid calmer political waters

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Luigi Di Maio (L) and Matteo Salvini have formed a coalition government
Matteo Salvini, leader of the eurosceptic League party, wrote on Facebook after meeting with 5-Star leader Luigi Di Maio: "Maybe, finally, we are there."The two parties have proposed law professor Giuseppe Conte to be the new prime minister.The new premier is to be sworn in today, after receiving the mandate to form a government by Italian President Sergio Mattarella.The government then faces votes of confidence in both houses of parliament next week.Greg McKenna, chief market strategist at AxiTrader, said markets had "over-reacted to the Italian mess" earlier in the week.
Italy's markets recover amid calmer political waters

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There were fears a second election could give anti-euro parties a stronger mandate
The "Italian mess" had seen stocks and the euro plunge, with fears that any second election could give the parties a new more anti-EU mandate.
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But in early Friday trading, the single currency was set to reverse its six-week losing streak after a drop in Italian bond yields.The euro traded flat on Friday at $1.1691 but on a weekly basis it looks like posting a small 0.3% gain, possibly depending on what happens in Spain, where prime minister Mariano Rajoy has been kicked out in a no-confidence vote.
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