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European stocks were mixed at the early trading on Monday as early elections loomed in Italy after the anti-establishment 5-Star and League parties abandoned plans to form a government.
The markets gave up early gains and bond yields recovered from lows, after Asian shares mostly gained on signs the United States and North Korea were still working towards holding a summit.
Early in the European session, the euro, Italy’s government debt and its FTSE MIB stock index all rose in opening trades. But those gains quickly dissipated, reports Reuters.
The European stocks were trading flat on the day and Italian bond yields were up 3 basis points on concern new elections would turn into a debate on euro membership.
The euro initially rallied 0.6 per cent to $1.1728, pulling itself above 6 1/2-month lows, but headed back towards the day’s lows to trade only 0.1 per cent higher at $1.1655.
The single currency strengthened by 0.8 per cent against the Swiss franc, rebounding from near three-month lows to trade at 1.1629, but also gave up much of those gains.
Italian 10-year bond yields had dropped 10 basis points to 2.35 per cent in early trade, coming off one-year highs, but investors quickly booked profits, pushing yields up 3 basis points on the day.
Italy’s FTSE MIB index turned negative on the day after climbing 1.4 per cent earlier as financials and utilities stocks surged.
Europe’s STOXX 600, and Germany’s DAX were flat on the day. MSCI’s main European index was down 0.1 per cent while its Asian counterpart rose 0.4 per cent as a retreat in oil prices from record highs helped sentiment.
Oil prices extended their decline from last week on growing expectations that major oil producers may ease their 17-month-old production cuts.
Brent crude futures dropped as much as 2.6 per cent to $74.49 per barrel, their lowest in about three weeks. They last stood at $75.00, down 1.8 per cent.
US crude futures dropped to six-week low of $65.80 per barrel, shedding 3.1 per cent, and is on course to post its fifth day of decline.