A general election has left Italy with no clear winner. WSJ's Chris Emsden suggests that even a grand coalition of the major parties would prove unworkable, making another election more likely. Photo: Reuters
Italy's political stalemate jolted European financial markets on Tuesday, weighing on stocks around the continent and sending investors scurrying out of bonds of Europe's troubled south and into northern havens.
Yields on 10-year Italian bonds jumped nearly half a percentage point in early-afternoon trading to 4.84%, their highest level this year. Spanish yields were more than 0.2 percentage point higher, and bonds of Portugal and Greece were also hit. Bond yields rise when their prices fall.
Strategists at Commerzbank predicted Italian yields would keep climbing toward 5%. Italy is poised to sell new bonds on Wednesday, which could be a catalyst for a further rise.
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