ITALIAN STOCKS PLUNGE NEARLY 5% - Borrowing Costs Surge After Upset On Election Night

It is a very rough start for Italian markets, following last night's shock elections, which are likely to result in a hung government.

The benchmark FTSE MIB stock market, based in Milan, is in complete free-fall.

And borrowing costs on the Italian 10-year are shooting up.

From Bloomberg:

This follows an election that seems destined to end with a hung parliament, or a very unstable coalition at best.

The significance is that Italy -- which is Europe's largest sovereign debt market -- may be ungovernable, raising the risk of a disruption to the progress that has brought borrowing costs down across the periphery over the last several months.

Furthermore, the election is a gigantic slap in the face to Brussels/German/Etc., as the big victors (Silvio Berlusconi and populist Beppe Grillo) ran on explicitly anti-Brussels campaigns.