Dow sinks nearly 400 points amid Italy's political crisis

Dow sinks nearly 400 points amid Italy's political crisis

Dow sinks nearly 400 points amid Italy's political crisis

The Frankfurt-based Sentix research group said its monthly "euro break-up" index, based on a survey of around 1,000 institutional and retail investors, more than doubled to 13 percent from 6.3 percent in April.

The upheaval in Italy is likely to lead to new elections that could become a referendum on Italy staying in the euro. Efforts to form a government collapsed Sunday after President Sergio Mattarella rejected a nominee for economy minister, Paolo Savona, who in the past had entertained a "Plan B" to leave the euro. The S&P ASX 200 slipped 0.4 percent to 5,990.40.

The dollar rose against most major currencies except the Canadian Dollar.

Elsewhere shares in Deutsche Bank recovered some of the previous session's heavy losses, climbing 2.8 percent higher following Thursday's drop of more than 7 percent in the after a report that the U.S. Federal Reserve a year ago designated the bank's U.S. operations to be in "troubled condition".

For a country to be eligible for OMT, it must be in a European Financial Stability Facility/European Stability Mechanism adjustment or precautionary program and support must be warranted from a monetary policy perspective.

Thursday's price action and continued recovery in the Euro after a steep sell-off earlier in the week indicates that investors have accepted that Italy has a problem, but that it may be a contained problem with less risk of contagion to the Euro Zone and nearly no risk to the global economy.

Italian stocks rallied as much as 2.9 percent, the standout performers in Europe as Italian banks gained 3.8 percent.

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The yield on the 10-year Treasury is one of the most closely watched financial measures in the world, along with the price of oil, gold and the US dollar.

Dialog's shares have slumped almost 40 percent so far in 2018, following a loss of 35 percent in 2017. The gap between Italian and German 10-year bond yields closed at the widest spread in four years, another indication of political risk to the euro zone.

The single currency plunged earlier this week and Italian bond yields soared, with 2-year bond yields posting their biggest one-day jump in 26 years on Tuesday on fears that fresh elections in the euro zone´s third biggest economy could strengthen the hand of anti-establishment parties. JPMorgan Chase dropped 4.3 percent to $105.93 and Bank of America fell 4 percent to $28.96.

Asian markets were mostly lower, with traders keeping an eye on oil prices, which have tanked since Saudi Arabia and Russian Federation indicated they could lift output, having abided by a self-imposed cap for two years. Heating oil shed 1.1 percent to $2.19 a gallon.

Seoul dropped 0.6 percent, while Wellington, Taipei and Manila were also off. The Nasdaq composite fell 37 points, or 0.5 percent, to 7,398.

Vedanta Resources declined 3.6% as India's Tamil Nadu state ordered a permanent closure of a big copper smelter run by the company. It lost 1.7 percent to $67.04 a barrel on Thursday.

In Asia, Japan's Nikkei 225 fell 0.6 percent while the South Korean Kospi lost 0.9 percent.

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