GLOBAL ECONOMY

Italy hit by market volatility after crushing referendum defeat

Dec. 5, 2016: Italian Premier Matteo Renzi speaks during a press conference at the premier's office Chigi Palace in Rome.

Dec. 5, 2016: Italian Premier Matteo Renzi speaks during a press conference at the premier's office Chigi Palace in Rome.  (AP)

Italy was plunged into political and economic uncertainty following voters' resounding rebuke of Premier Matteo Renzi's proposed constitutional reforms.

Renzi announced he would quit following Sunday's referendum vote, in which 60 percent of voters rejected his reforms and signaled they wanted a change in political direction. Renzi is expected to hand in his resignation to President Sergio Mattarella later Monday.

The Milan Stock Exchange opened down 2 percent, but many bank shares were suspended due to excessive volatility meaning the hit could be even deeper.

The results hit Italy's sovereign debt, increasing the spread on Italy's 10-year bonds to 2 percent, from 1.7 percent on Dec. 1 and a record low of just over 1 percent last March and April.