Markets steady as Renzi poised to become new premier; trading subdued on US Presidents Day

The Associated Press

Cuirassiers presidential guards salute as Italian Democratic Party's leader Matteo Renzi arrives to meet journalists at the Quirinale presidential palace after talks with Italan President Giorgio Napolitano, in Rome, Monday, Feb. 17, 2014. Renzi was asked to form a new government to replace the one he sacked through a stunning power-grab within his own party. Renzi drove himself to his meeting with Napolitano, mimicking the down-to-earth approach of his predecessor, Enrico Letta.(AP Photo/Alessandra Tarantino)

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By PAN PYLAS, AP Business Writer

LONDON (AP) — Global markets were steady on Monday as investors sought clarity over Italy's political and economic future and took to the sidelines as Wall Street remained shut for a holiday.

Now that Italy's President Giorgio Napolitano has asked Matteo Renzi to form a new government, investors want to see how quickly he tackles reforms needed to get the economy going.

Renzi, who is the mayor of Florence and poised to be the country's youngest premier at 39 years of age, engineered last week's ouster of Enrico Letta, who had only been Italy's leader for 10 months. Renzi argued a change of government was needed to get on with reforms.

Italy only recently emerged from recession, figures showed last week, but growth remains paltry. Its debt burden is also the second-highest in the 18-country eurozone, behind Greece.

"While political turmoil is nothing new in Italy, the return to growth last week was, but it was meagre at best, and Renzi may not have much of a honeymoon period if all we get is more of the same," said Michael Hewson, senior market analyst at CMC Markets.

By midday in Europe, Italy's FTSE MIB index was flat at 20,435. Elsewhere, Germany's DAX was up 0.1 percent at 9,670 while the CAC-40 in France fell the equivalent rate to 4,337. The FTSE 100 in Britain was outperforming its counterparts, trading 1 percent higher at 6,730, gaining momentum as it broke through the 6,700 level for the first time in over 3 weeks.

One reason why trading has proved lackluster in Europe is the fact that U.S. markets are closed for Presidents Day.

There was an equally subdued feel in currency markets, where the euro was flat at $1.3702 and the dollar fell 0.2 percent to 101.32 yen.

Earlier, in Asia, the mood was a little bit more upbeat, after figures showed that lending by Chinese banks and in the largely unregulated underground market rebounded to 2.6 trillion yuan ($430 billion) in January from December's 1.2 billion yuan. Lending usually surges at the start of a new year but January's rise exceeded forecasts and might help to ease worries about cooling retail sales, manufacturing and other activity.

Among the gainers was the Shanghai Composite Index, which added 0.9 percent to 2,135.41. Japan's Nikkei 225 gained 0.6 percent to 14,393.11 while Hong Kong's Hang Seng rose 1 percent to 22,520.74.

Tokyo's rise came despite Japan's latest quarterly economic growth disappointing forecasters, holding steady at 0.3 percent. Growth in private consumption accelerated to 0.5 percent from the previous quarter's 0.2 percent but fell short of forecasts.

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