Market update: Investors welcome new Italian ‘grand coalition’ – 29.04.2013

Source: Henderson Global Investors

On Friday, US equities were dragged down by lower-than-expected first quarter annualised economic growth of 2.5% (S&P 500 -0.2%, Dow Jones +0.1%, Nasdaq -0.3%). Also weighing on sentiment were more mixed quarterly earnings results. Oil major Chevron’s profits were flat and National Oilwell Varco reported a fall in earnings. Meanwhile, online retailer Amazon delivered higher revenues but profit fell due to increased long-term investments. On a more upbeat note, the University of Michigan´s consumer confidence index came in at 76.4, bettering a Bloomberg forecast of a larger fall to 73.5.

This morning investors in Europe are welcoming the news over the weekend that after weeks of political deadlock, Italy has formed a coalition government, avoiding further elections. Enrico Letta from the Democratic Party was sworn in as prime minister. Earlier, three parties had received similar shares of the vote, and were unable to agree on a coalition. At the time of writing the FTSE Eurofirst 300 is up 0.1% while the FTSE 100 is flat. In Asia, it will be a quiet week as Japanese markets are closed today as the Golden Week kicks off, while Chinese markets are closed for the Labor Day holiday till Thursday.