Elections to drive AIB sale as Italian banks fall

Markets took a lost referendum and the resignation of Italian prime minister Matteo Renzi on the chin, but Irish taxpayers and Government advisers here will be peering into the distance to see what European elections next year will hold for the sale of AIB, as shares in Italian banks fell sharply.

Despite the result, the euro gained against both the dollar and sterling, strengthening to over $1.07 and 84.6 pence, even as polls suggested an early election in Italy would see the anti-euro Five Star Movement sweep into power.

“The [calm] reaction of the euro was a surprise,” said a senior analyst at Cantor Fitzgerald Ireland, Ryan McGrath, who added, however, that, as expected, Italian bonds took a hit, with the yield on its 10-year bond rising by “a significant” 13 basis points, to 2.03%.