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Morning Market Roundup: Berlusconi Party Abstains in Gov't Confidence Vote, UK Fears Downgrade


Here’s what’s important in the business world this morning:

Italy: Lawmakers belonging to Silvio Berlusconi's center-right party have abstained in a confidence vote in the government of Premier Mario Monti, raising questions over its future.

Though the government won the vote Thursday by 127 to 17, investors feared the move may herald a period of political uncertainty in the run-up to planned elections next year.

The Milan stock exchange fell sharply with the benchmark FTSE MIB trading 1 percent lower at 15,795.

Political parties are gearing up for elections next year to replace Monti's year-old government.

Berlusconi has been hinting at a comeback, after earlier saying he would leave the party to a younger candidate. The center-left has been energized by a lively primary that saw party secretary Pier Luigi Bersani win the nomination.

U.K.: Britain's Treasury chief has acknowledged that the country may lose its triple A credit rating even though his economic strategy remains centered on getting the public finances under control.

George Osborne said Thursday that a downgrade "wouldn't be a good thing" but that it was only one way that investors evaluate countries.

Osborne's comments come in the wake of Fitch Ratings' warning that Britain's debt levels for 2015-16 announced were "approaching the upper limit of the level consistent with the U.K. retaining its AAA status."

Fitch placed Britain's rating on negative outlook in March, and will conduct a review next year.

Rivals Moody's put the AAA rating on negative watch in February while Standard & Poor's has been more optimistic, affirming the top rating in April with a stable outlook.

Markets: In Europe, the FTSE 100 index of leading British shares is up 0.3 percent at 5,911 while Germany's DAX is up 1.1 percent at 7,535. The CAC-40 in France is 0.5 percent higher at 3,610.

Wall Street is poised for a solid opening, with both Dow futures and the broader S&P 500 futures up 0.2 percent.

Investors are interested in hearing what ECB President Mario Draghi says in his press conference after the conclusion of the governing council's monthly meeting. Even though the economy of the 17 European Union countries is in recession, the ECB is widely expected to keep its main interest rate unchanged at the record low 0.75 percent.

Earlier in Asia, shares in China were flat-footed after big gains in the previous session when investors were cheered by hopes of more stimulus measures. The main Shanghai index ended 0.1 percent lower at 2,124.80, while Hong Kong's Hang Seng fell 0.1 percent to 22,249.81.

However, Japan's Nikkei 225 index rose 0.8 percent, in part buoyed by a weaker yen, to close at 9,545.16. That was its first closing above 9,500 since April.

The Associated Press contributed to this report.

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