Italy’s political collapse nullified a positive start to trading on Tuesday as market were dragged into the red, the FTSE 100 closed 64.65 points lower at 7,125.
Italian premier Giuseppe Conte announced his resignation on Tuesday blaming the deputy prime minister over his decision to end his 14-month old populist government. This announcement unnerved traders.
Connor Campbell, financial analyst at Spreadex, said: “The re-emergence of the political collapse in Italy as another crisis for investors to fret over turned a muted-to-positive day of trading into something more troubling.
“Though not as intimately engrossed in Italian politics, the FTSE ended up being Tuesday’s worst performing major index.”
David Madden, market analyst at CMC Markets UK, added: “The Italian political news isn’t a shock, but nonetheless it chips away at investor confidence.”
On the back of Conte’s resignation Italy being the third largest economy in the Eurozone could enter into a general election later this year, this saw key European markets slump.
The French Cac fell by 0.5% whilst the German Dax decreased by 0.55%.