Europe close: Italian stocks clobbered as Conte government falls
Stocks across the Continent fell back at the end of the week following news that the Italian Senate might schedule a no-confidence vote against the current government for as soon as Monday, threatening to reignite tensions around the euro area's fourth largest economy.
According to ANSA, the League, one of two parties in Italy's coalition government, tabled a no-confidence vote against the current Prime Minister, Giuseppe Conte, on Friday, with its leader, Matteo Salvini, having called for early elections.
"Too many noes are bad for Italy, which needs to grow and, therefore, to have new elections soon," Salvini reportedly said.
"Those who waste time, harm the country and are only thinking about their positions."
Against that backdrop, by the end of the session, the benchmark Stoxx 600 had fallen by 0.84% to 371.56, alongside a drop of 1.28% to 11,693.80 for the German Dax, while the FTSE Mibtel surrendered 2.48% to 20,324.23.
In parallel, the yield on the benchmark 10-year Italian government note was ran up 27 basis points to 1.81%.
But the damage appeared to be largely limited to Italian debt, with the yield on similarly-dated Spanish bonds up by just four basis points alongside to 0.26%.
The latest economic data out at the end of the week in the Eurozone was not much better.
In particular, figures from Germany's Federal Office of Statistics showed the country's trade surplus flat versus the month before in June at €18.1bn (consensus: €18.6bn).
A preliminary reading of €18.5bn for May meanwhile was revised lower to show a smaller surplus of €18.1bn.
Meanwhile in France, INSEE reported that industrial production dropped at a 2.3% month-on-month clip (consensus: -1.4%).