Morning business round-up: Markets hit by Italian deadlock
- 26 February 2013
- From the section Business
What's making the business news in Asia and Europe this morning? Here's our daily business round-up:
Italy's election result cast a shadow across European markets. Shares plunged after the inconclusive outcome raised fears that political deadlock in Italy will delay economic reforms.
Italy's FTSE MIB share index fell 4.7%, while London's FTSE 100 shed 1.5% and share markets in Frankfurt and Paris also fell more than 2% at the start.
The yield on Italian government bonds also rose sharply, implying markets are more wary of lending to Italy.
Oil prices also dropped, hit by worries that uncertainty in the eurozone could hit demand, with Brent crude falling 87 cents to $113.57 a barrel.
With all domestic votes counted in Italy's parliamentary election, the centre-left bloc won the lower house by a tiny margin, but did not secure a majority in the Senate.
Fears are that a split parliament will make it harder for one group to push through their plans to revive the economy, and that may stall Italy's process of cutting its public debt levels.
Among company news, French media and telecoms giant Vivendi reported a fall in profits, although its results still beat analysts' forecasts.
Adjusted net profit for the fourth quarter of 2012 fell 17.8% to 356m euros (£306m), while for the full year it fell 13.6% to 2.55m euros.
The group highlighted an "exceptional year" from its Activision Blizzard video games business.
But its SFR mobile unit saw revenues fall 7.3% in the year as it is still adapting to regulatory price cuts.
German authorities are investigating allegations of fraud over the mislabelling of eggs as organic.
The northern state of Lower Saxony has launched an investigation into allegations that 150 farms had mislabelled their eggs.
It is claimed that the hens live in conditions that do not conform to organic regulations.
The farm minister said that if the accusations are proved to be true, it would be "fraud on a grand scale".
In the UK, Redrow has become the latest UK housebuilding firm to report a sharp increase in profits.
The company said its pre-tax profits rose 50% to £23m for the six months to December, and also said that government attempts to revive the mortgage market appeared to be starting to work.
Its results and comments echoed those of rival housebuilders Persimmon and Bovis, who both reported results on Monday.
The latest Business Daily podcast from the BBC World Service considers the aftermath of Italy's election. What will it mean for Italy's efforts to escape from its worst recession in decades? And could this spur a new crisis in the eurozone?