Madrid stock market plunges over Spain, Italy uncertainty

Madrid (AFP) –


Madrid's stock exchange plunged Tuesday led by Spanish banking giants as Prime Minister Mariano Rajoy faces a no-confidence vote later this week, with investors rattled further by political turmoil in Italy.

Banco Santander, the eurozone's biggest bank by market capitalisation, fell 5.21 percent at 4.63 euros around 0910 GMT, while BBVA lost 3.52 percent at 5.92 euros.

The stock market in early trading lost more than three percent before recovering slightly to around 2.6 percent.

Rajoy faces a vote of no confidence on Friday over a graft trial that uncovered a vast system of bribes given to former officials or lawmakers of his Popular Party in exchange for juicy contracts between 1999 and 2005.

The upcoming vote has plunged Spain further into uncertainty at a time when the wealthy northeastern region of Catalonia is rocked by a secession movement.

Investors are also nervous as Italy faces the prospect of fresh elections as early as September after a nascent anti-establishment, eurosceptic government collapsed over the weekend.