The iShares MSCI Italy Capped ETF (NYSEArca: EWI) traded lower Monday, a day after elections in the Eurozone’s third-largest economy.
“Populist parties staged a strong showing in Sunday’s vote, and polls showed that they won about half of all votes cast,” reports MarketWatch. “The results were seen as underscoring the depth of anger among Italians at the country’s direction and the continued power of right-leaning populist parties in European politics. If confirmed, the outcome could crack the door open to the possibility of an alliance between anti-establishment parties to form a new government.”
The $719 million EWI follows the MSCI Italy 25/50 Index and holds 24 stocks. Stocks in the Eurozone’s third-largest economy are among the the least expensive in Europe though Italy is a volatile market relative to peers such as Germany and France. EWI has a three-year standard deviation of 19.1%.
“Forming a government could take weeks of negotiation and coalition-building,” according to the BBC. “Former Italian prime minister Matteo Renzi has resigned as leader of the governing centre-left Democratic Party, which performed poorly, taking less than 20% of the vote. An alliance between the far-right League and ex-Prime Minister Silvio Berlusconi’s Forza Italia party is set to win the most seats in the lower house of parliament.”