European Markets Fall on Monti’s Resignation, Italian Bond Yields Climb

“European stocks fell from an 18- month high, the euro weakened and Italy’s bonds slid on concern a leadership change in the country will disrupt efforts to curb debt. Commodities gained as China’s factory output and retail sales beat analyst estimates.

The Stoxx Europe 600 Index lost 0.5 percent at 7:20 a.m. in New York, as Italy’s FTSE MIB sank the most in 10 weeks. Standard & Poor’s 500 Index futures slipped 0.2 percent. Italy’s 10-year bond yield had the biggest increase in more than four months. Austrian, Belgian and French borrowing costs slid to record lows while the euro depreciated against the dollar for a fourth day. The Shanghai Composite Index climbed 1.1 percent. The S&P GSCI gauge of raw materials rose 0.4 percent, with copper advancing to a seven-week high.

Italian Prime Minister Mario Monti said he lost support and will resign, while his predecessor, Silvio Berlusconi, announced he will run for the premiership to roll back Monti’s budget rigor.Greece extended the deadline for a bond buyback that will release a bailout payment, the country’s debt agency said today. China’s factory output jumped 10.1 percent in November and retail sales rose 14.9 percent, reports showed yesterday.

“That Berlusconi is coming back clouds up the European political backdrop,” said Louis de Fels, a Paris-based fund manager at Raymond James Asset Management International, which oversees $35 billion worldwide. “This and the fiscal cliff explain the decline we are seeing today.”

Full article