European markets bounce back from Renzi-sparked losses

European stocks and the euro rebounded sharply today as investors were reassured by the speed of Italian Prime Minister Matteo Renzi's resignation after losing a crunch referendum.
The region's markets began the day in negative territory, with Milan tumbling two per cent, but recovered somewhat with sentiment soothed also by the defeat of the far right in Austria's presidential election.
"The Italian referendum is the major story that will dominate market moves throughout Monday... After Renzi left his position after a bruising defeat," said GKFX analyst James Hughes.
"The initial market reaction was to the downside, but Renzi's decision to leave so quickly after the result meant that added clarity drove the euro and European equity markets to the upside."

Renzi stood by his promise to resign after his attempt to change the constitution was overwhelmingly rejected in yesterday's poll, leading to fears about the future of one of the eurozone's biggest economies.
The referendum verdict sent the European single currency crashing to USD 1.0506 - the lowest level since mid-March 2015 - before bouncing back over USD 1.07.

Equities also staged a recovery. Frankfurt won 1.3 per cent, Paris gained 0.6 per cent and London added 0.1 per cent, reversing initial losses.
"European markets have been surprisingly resilient... As initial fears of another eurozone crisis have been largely brushed aside," said IG analyst Joshua Mahony.

"Sharp depreciation in the euro and European indices have been swiftly reversed, bearing more than a passing resemblance to the UK referendum and US election results.