Credit-default swaps on Telecom Italia SpA jumped and the stock dropped 7.3%. The nation’s biggest phone company delayed a sale of as much as 3 billion euros ($3.9 billion) of hybrid bonds to boost its balance sheet until after the election.
In the four-way race in Italy, pre-vote favorite Bersani won the lower house by less than a half a percentage point. Former premier Silvio Berlusconi, who pledged to reverse austerity measures, won a blocking minority in the Senate.
“The surprising outcome of the Italian election has not only changed Italy’s political landscape,” Hans Redeker, head of global foreign-exchange strategy at Morgan Stanley in London, wrote in a report today. “The impact of the election result will be felt throughout Europe.”
The VStoxx Index, a gauge of the price of options prices on the Euro Stoxx 50 Index, climbed 22% to 25.9, the highest level since September.
Crude oil in New York fell 0.5% to $92.63 a barrel before a report that may show U.S. crude inventories rose. The S&P GSCI Index lost 0.8% to the lowest level since Jan. 16 as energy commodities led losses.
The MSCI Emerging Markets Index sank 1.1%, with benchmark gauges in China, India, Russia, Hungary, the Czech Republic and the Philippines dropping more than 1%. Trading volumes were 113% higher than the 30-day average for companies in Russia’s Micex Index. In Shanghai, 9.5% fewer shares changed hands than the 30-day average, while 14% more stocks traded in India.