Italian shares fall and bond yields jump amid fresh political crisis

Investors fled Italian equities on Monday morning as political tensions resurfaced in Italy, while fears of a potential US government shutdown also impacted markets across Europe.

Italy's FTSE MIB index was down 1.6% at 17,269 by 9.43am London time, while S&P 500 futures edged 0.8% lower. The FTSE 100 was also lower in morning trading, down 0.8% at 6,463 points. Investors are spooked after it emerged Italy may be forced into new elections just seven months after the last vote. The country faces the risk of yet another election after Silvio Berlusconi pulled his ministers out of the ruling coalition at the weekend. The Italian bond market reflected these fears, with ten-year government bond yields up 31 basis points to 4.73%, their biggest one day gain since Jun...