(Corrects paragraph two to show not all major blocs suppported
MILAN, April 22 Investors cheered the
re-election of 87-year-old Giorgio Napolitano as president of
Italy on Monday, hoping this would accelerate the formation of a
new government and end a two-month political gridlock.
Napolitano, elected after days of squabbling thanks to a
broad agreement between some of the major blocs, had made clear
before the election that he favoured a new government over
potentially destabilising new elections.
Italian business leaders have been calling on parties to end
the current stalemate and implement measures that can help
reverse the current deep economic recession.
The Italian BTP June futures contract was up 75
ticks at 113.75. Traders said the main Italian stock market
index, the FTSE MIB, was seen gaining more than 1 percent up at
"The market reaction is justified by expectations Napolitano
will form a new government quickly, possibly within a week,"
Vincenzo Longo, a market strategist with IG Italia.
An inconclusive election at the end of February has left
Italy with a split parliament dominated by three litigious
parties that have been unable to form a government.
Napolitano, the first president in Italy's history to be
re-elected for a second term, will spell out his strategy later
A source in the presidential palace told Reuters Napolitano
could either hold a quick round of consultations starting on
Tuesday or skip them altogether because he has already sounded
out party leaders officially twice since the deadlock began.
"Given the strong support behind Napolitano's re-election,
it is likely that a grand coalition government will find support
too," Credit Suisse said in a note to clients.
(Reporting By Lisa Jucca and Francesca Landini, editing by