The largest exchange-traded fund to track Italy’s equity market fell on Monday, in the wake of a national election that yielded no clear-cut winner. The iShares MSCI Italy ETF fell 1.5% and was on track for its fifth straight daily decline. The fund has tumbled 9.9% from a recent closing high hit in late January, though it remains up 1.9% for 2018, having been supported by “an improving economic picture,” according to Chris Dhanraj, head of ETF investment strategy at BlackRock. Populist parties staged a strong showing in Sunday’s vote, and polls showed that they won about half of all votes cast. 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 antiestablishment parties to form a new government. While the results indicated heightened political uncertainty in the short term, BlackRock’s Dhanraj said he doesn’t “see this as a sustained negative for the euro or regional equities,” although “political noise is poised to remain high until a sustainable coalition emerges.” The Dow Jones Industrial Average rose 0.4% on Monday while the S&P 500 was up 0.5% and the Nasdaq Composite Index was up 0.4%.
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