By PAN PYLAS
LONDON (AP) â¿¿ Markets roared ahead Monday as the momentum that has marked 2013 re-established itself amid early indications that the center-left will be able to form a government in Italy.
Early polls out of Italy show that the coalition led by Pier Luigi Bersani has claimed the most votes in the election. Bersani has promised to meet current targets and pursue more economic reforms.
If the polls are correct, then the center-left coalition should be in a position to form a government, possibly in conjunction with Mario Monti, the former technocratic premier who has been widely credited in the markets for dousing the country's debt crisis in the past year.Andrew Wilkinson, chief economic strategist at Miller Tabak & Co., said that prospect was "probably the most market-friendly outcome." Italian stocks, already sharply higher, pushed further ahead, to trade up 3.4 percent, while the yield on the country's 10-year bond dropped 0.21 percentage points to 4.18 percent. That is around 3 percentage points down from about a year ago, when concerns about the country's debt were at their height. The advance wasn't just confined to Italy. Germany's DAX was up 2.2 percent at 7,831 while the CAC-40 in France was 1.7 percent higher at 3,768. The FTSE 100 index of leading British shares rose 0.7 percent to 6,380 despite last Friday's downgrade of the country's credit rating by Moody's. The euro was buoyant too, trading 0.4 percent higher at $1.3270. Italy's stability is hugely important for the future of the euro currency. Of the 17 European Union countries that use the euro, it has the second-highest debt burden as a proportion of its annual gross domestic product. Only Greece's is higher. Considered to be too big to bail out, its future in the single currency bloc, at least as far as markets are concerned, is to enact economic reforms and tight budgetary controls. Monti's government was supported in the markets even though he personally saw his popularity falter amid recession and rising unemployment.