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Equities plummet amid fears over Italy's political crisis



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<p>  The escalating political crisis in Italy caused share prices to plummet on Tuesday, with the Dow Jones Industrial Average losing 1.8 percent of its value. </p>
<p>  European bank stocks were hardest hit, Italy's Unicredit and Spain's Santander fell more than 5 percent, but US banks were also hit. </p>
<p>  When stocks plummeted, investors invested money in safe havens. US Treasury yields fell the most in two years, and the dollar gained ground against the euro. </p>
<p>  The sell-out took place after Italian President Sergio Mattarella rejected the election of a finance minister who was sometimes critical of Italian membership in the eurozone </p>
<p>  The president's move stopped the efforts of two populist political parties to form a government , and made it more likely that elections will have to be held in the coming months. </p><div><script async src=

Although the two parties say they do not have a move away from the Eurozone, the mere suggestion of such a step has scared investors. The country is the third largest economy in the Eurozone and also has significant debt, mostly held by foreign banks.

Churning out would upset the entire global economy and raise questions about the future of globalism Britain's exit from the European Union

"There is an existential danger over the single currency if we hold more elections this summer "I do not know how we get away from it given the scale of its financial impact," said Kit Juckes, chief foreign exchange strategist at Societe Generale, to The Wall Street Journal.

In an unusual speech, Governor of the Italian Central Bank, Ignazio Visco, warned of the consequences of such a move.

We must never forget that we are only a few steps away from the very serious risk of losing the irreplaceable advantage of trust, "he said.

" Italy's fate is that of Europe. We are part of a very large and deep-seated economic area whose development is determined by Italy and at the same time depends on it, "he said.

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