Italy leads markets lower

EUROPEAN markets fell for a third consecutive day yesterday as the eurozone crisis spotlight switched to Italy.

News of the pending resignation of Italy’s prime minister Silvio Berlusconi did little to calm investors, as the country’s cost of borrowing escalated to record proportions. For the first time since the introduction of the euro, Italian bond yields — or the interest rate demanded by debt buyers — exceeded the 7% mark with talk rising that Italy could prove too big to bail out.

The country’s benchmark index — the Milan-based Borsa Italiana — fell by under 4%, or over 590 points.