The euro fell to a 20-month low on Monday and investors fled riskier assets after Italian Prime Minister Matteo Renzi said he would resign following a stinging defeat on constitutional reform that could destabilise the country's shaky banking system.
Renzi's defeat deals a body blow to the European Union already reeling under anti-establishment anger that led to the shock exit of UK from the club in June this year.
Mark Wills, head of State Street Global Advisors' investment solutions group for the Asia Pacific region said in a statement
It's not very hard to see a new election, and it's not very hard to see the (opposition) 5-Star Movement taking power and they've basically said they want to get out of either the European Union or the euro or both.
Opposition parties had denounced the proposed amendments to the constitution as dangerous for democracy because they would have removed important checks and balances on executive power. The defeat and Renzi's departure threatens to plunge Italy into a new phase of political uncertainty and possible economic turmoil.
- http://economictimes.indiatimes.com/markets/stocks/news/euro-under-the-gun-shares-hit-after-italy-votes-no-on-reform/articleshow/55804108.cms
- http://www.business-standard.com/article/reuters/euro-skids-shares-hit-after-italy-votes-no-on-reform-116120500171_1.html
- http://profit.ndtv.com/news/market/article-nikkei-falls-nearly-0-5-after-italian-pm-quits-1633989
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