Italy leads stock market rebound

Markets rebounded on Wednesday.

Asian stocks fell sharply early in the session, with the Nikkei 225 tumbling 1.5 percent, following Tuesday's losses in the US and Europe.

However, later on, Italy's FTSE MIB surged 2.1 percent to pull the STOXX Europe 600 up 0.3 percent and the S&P 500 jumped 1.3 percent.

“Markets were much calmer today after yesterday’s volatility in response to growing political uncertainty in Italy,” said analysts at Daiwa Capital Markets in a note.

However, Michael Antonelli, equity sales trader at Robert W. Baird & Co, said: “Anything coming from the left field can shatter markets nowadays, so we have to brace for a long summer grind.”