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May 24, 2018, 11:55 a.m. EDT

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By Sara Sjolin, MarketWatch

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Conte was proposed as prime minister by the coalition of 5 Star Movement and League, which now stand to take power and make Italy the largest country in Europe to be led by an antiestablishment government.

The two parties are already on a collision course with the EU, having promised to challenge Brussels’s budget guidelines and rules on immigration.They have also vowed to increase fiscal spending and cut taxes — moves some worry could throw the Italian economy into disarray and create a new sovereign debt crisis.

Check out: How stock-market investors could be surprised by a peak in interest rates

What are strategists saying?

“We see two opposing forces impacting Italian and, by extension, euro-area assets. The slow-burning force is the deepening of the growth cycle, which is helping the balance sheet of the Italian economy to improve, boosting the performance of riskier asset classes,” analysts at UBS said in a note.

“The faster-moving force is the ebb and flow in political risk premium. Our working assumption has been that risk premium would not escalate dramatically enough to derail the positive impact from stronger growth. The events of the last few days in Italy have questioned our views. It is still early to shift camps. Yet it is high time to stress-test key assets and trades to levels of escalation in Italian risk premia,” they added.

The yield on 10-year Italian government bonds /zigman2/quotes/211347230/realtime BX:TMBMKIT-10Y -1.81%  fell 2 basis points to 2.395% on Thursday.

Stock movers

Shares of Deutsche Bank AG /zigman2/quotes/205584254/delayed DE:DBK +0.70%   /zigman2/quotes/203042512/composite DB +0.49%  fell 4.8% as critics demanded the resignation of Chairman Paul Achleitner at the bank’s annual general meeting.

Shares of Aryzta AG /zigman2/quotes/206947852/delayed CH:ARYN +4.90%  plunged 27% after the Swiss bakery group reported a 17% drop in third-quarter revenue and lowered its full-year guidance.

Mediclinic International PLC /zigman2/quotes/201361237/delayed UK:MDC +2.28%  lost 9.4% after the health care group said it swung to a full-year pretax loss due to one-time charges related to its Switzerland business and intangible assets.

United Utilities Group PLC  gave up 1.1% after reporting a 2.4% fall in fiscal 2018 pretax profit.

Shares of Tate & Lyle PLC /zigman2/quotes/205109332/delayed UK:TATE -0.07%  rose 7.3% after the food ingredients maker said adjusted profit rose 13% in the last fiscal year.

Shares of Daily Mail & General Trust PLC /zigman2/quotes/206568132/delayed UK:DMGT -1.24% lost about 10% after the newspaper publisher reported a drop in revenue in the first half of fiscal 2018.  

/zigman2/quotes/211347230/realtime
add Add to watchlist BX:TMBMKIT-10Y
BX : Tullett Prebon
1.10
-0.02 -1.81%
Volume: 0.00
May 18, 2021 5:30p
loading...
/zigman2/quotes/205584254/delayed
DE : Germany: Frankfurt
11.82
+0.08 +0.70%
Volume: 52,284
May 18, 2021 5:56p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€417,912
loading...
/zigman2/quotes/203042512/composite
US : U.S.: NYSE
$ 14.39
+0.07 +0.49%
Volume: 2.69M
May 18, 2021 12:40p
P/E Ratio
17.82
Dividend Yield
0.00%
Market Cap
$29.33 billion
Rev. per Employee
$449,141
loading...
/zigman2/quotes/206947852/delayed
CH : Switzerland: SWX
CHF 1.09
+0.05 +4.90%
Volume: 8.13M
May 18, 2021 5:31p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
CHF1.03 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/201361237/delayed
UK : U.K.: London
305.60 p
+6.80 +2.28%
Volume: 264,239
May 18, 2021 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£2.20 billion
Rev. per Employee
£93,030
loading...
/zigman2/quotes/205109332/delayed
UK : U.K.: London
802.00 p
-0.60 -0.07%
Volume: 806,011
May 18, 2021 4:35p
P/E Ratio
15.15
Dividend Yield
3.69%
Market Cap
£3.72 billion
Rev. per Employee
£683,262
loading...
/zigman2/quotes/206568132/delayed
UK : U.K.: London
878.00 p
-11.00 -1.24%
Volume: 123,768
May 18, 2021 4:35p
P/E Ratio
32.45
Dividend Yield
2.74%
Market Cap
£1.84 billion
Rev. per Employee
£211,197
loading...

Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.

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