May 28, 2018 / 9:35 AM / 10 months ago

Italian bonds, stocks turn negative on day as sentiment turns

LONDON, May 28 (Reuters) - Italian bonds and stocks turned negative on the day, wiping out gains from earlier in the session, partly on fears over fresh elections and as investors took advantage of a brief rally to sell their Italian assets.

Italian 10-year government bond yields, which move inversely to price, were 3 basis points higher at 2.48 percent, having dropped 10 bps in early trade.

The Italian 2-year bond yield was up 7 basis point at 0.54 percent, having been lower 14 bps at one point.

Italy’s main stock index fell 0.8 percent by 0925 GMT, having surged at the open. Italian bank stocks fell 1.3 percent to a new 11-month low as investors looked to potential negative outcomes from likely fresh elections.

Italy’s anti-establishment 5-Star Movement is considering campaigning together with the far-right League if the nation goes back to the polls, a 5-star source said on Monday.

The euro meanwhile, lost most of its early gains, and was up 0.1 percent around 1030 BST. It had been up as much as 0.6 percent earlier in the session. (Reporting by Abhinav Ramnarayan and Helen Reid, Editing by Saikat Chatterjee)

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