Italian political drama rocked European markets in the last week of May as record amounts drained away from Italian equity funds, data showed.
According to EPFR Global, which tracks funds with over $31 trillion in assets under management, Italy equity funds saw over $380 million (€321 million) redeemed in the five days ending May 23.
This eclipsed the previous outflow record set in mid-2014 when Italy was slipping into its third recession since the start of the Great Financial Crisis.
The emerging coalition government has promised tax cuts, higher social spending and reforms to labour market and public pensions, which could increase Italy's fiscal deficit and spark a confrontation with the Eurozone and the broader European Union.
Concerns about Italy prompting fresh turmoil in European debt markets saw Europe bond funds end the third week of May with their biggest outflow since the first quarter of 2017.
Overall there were outflows of $1.84 billion from European bond funds while $2.57 billion left European equity funds in the five days to May 23.
Italian bond funds were also hit during this five-day period as investors pulled out $21 million.
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