Neil Wilson of ETX Capital says that, so far, it’s been a "fairly orderly response from the markets to Italy’s referendum result".

Image source, AFP

Shares in Italy's troubled banks have taken a hit at the start of trading, as expected after Matteo Renzi's resignation. 

Monte dei Paschi - Italy's third biggest bank and oldest lender - is down 5.72%, Banca Popolare Milano is down 4.1% and Unicredit is down 4.03%.

Meanwhile, Unione di Banche Italiane has slipped 4.36% and Mediobanca Group is 3.79% lower.   

The main Italian stock index, the FTSE MIB, is down 1.28%.

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Peter Hahn, professor of banking at the London institute of banking and finance, says the ECB could respond to the Italian referendum outcome by extending its quantitative easing programme. 

This would prevent Italy's cost of debt from rising, as investors shunned risky Italian assets.

But there's a good chance the ECB won't act, he says, as other EU countries could object to it "propping up the Italian economy and Italy's banks". 

Image source, Bloomberg

The pound has risen against the euro, hitting €1.20, on the back of the Italian Prime Minister's resignation.

The chart above shows how the latest rise continues a storming month for sterling.

It has jumped from €1.12 in early November on the back of heightened political uncertainty in the EU and investors' concerns about a "hard Brexit" easing.

Image source, Getty Images

As predicted, Italian bond yields have jumped after Matteo Renzi's referendum defeat. 

This morning, Italy's 10-year government bond yield rose 13 basis points (bps) to above 2%  - although that was below a 14-month high of around 2.17% touched in November. Two-year Italian government yields rose by 4 bps to 0.23%. 

It has impacted Portuguese and Spanish bond yields, which have both climbed, while safe-haven German Bund yields dipped 1.1 bps to 0.27%.

Today Programme
BBC Radio 4

Image source, Getty Images

It's "undeniable" that some prices will go up early next year due to the weaker pound, says Ewan Venters, chief executive of London department store Fortnum and Mason, 

"The truth is it's impacting margins as we speak," he says.

"But it would be wrong to adjust pricing this side of Christmas. Everyone's holding back and we'll see movement early in the New Year."

Fortnum this morning reported a rise in annual profits to £6.2m, up by a quarter, on sales of £111m.

Image source, Reuters

Royal Bank of Scotland says it's struck a deal with three out of five shareholder groups who allege the bank misled them ahead of a rescue fundraising in 2008. 

In a statement, external, the state-owned lender says it's willing to pay out £800m to the five groups in the dispute, which dates back to the financial crisis. 

Ross McEwan, chief executive of RBS, says: "We have been very clear that we wanted to deal with as many of our legacy litigation issues as possible during 2015 and 2016."

It's worth remembering that Matteo Renzi is not the only prime minister to have stepped down in the last 24 hours. The New Zealand premier, John Key, also announced he would quit, citing family reasons.

Mr Key, a popular leader, said it was a personal decision, and later denied media reports his wife of 32 years, Bronagh, had given him an ultimatum.  

Following the announcement the New Zealand dollar slid almost 1%, to $0.707, but it has recovered to trade at $0.715 - up 0.2%.

John Foley, Reuters Breakingviews' editor for Europe, the Middle East and Africa, says yesterday's referendum was really a vote on the Prime Minister. 

Italy is in bad need of reform - which is why Matteo Renzi called the vote. But while some did object to his plans to reduce the size of the Italian senate, in the end the vote became a "popularity contest" about Renzi. 

However, without reform, the outlook for Italy's economy has got bleaker, says Mr Foley.

"Renzi was a reformer and now he is not around... The chances of reform have gone down and the markets will reflect that today."  

Today Programme
BBC Radio 4

Image source, Reuters

The key risk from the Italian referendum outcome is "contagion" to the EU's banks, says David Cumming, head of equities at Standard Life.

"It's the banking sector people will be watching over the next few days."

But for contagion to really take hold, Italy would need to leave the euro, and that's quite unlikely, he says.

There would need to be a new election, won by the eurosceptic 5 Star Party, who would then need to change the constitution if they wanted to hold a referendum on euro membership.

Image source, Reuters

Asian shares edged downwards after nerves over Italy's referendum result spread.

Tokyo's benchmark Nikkei 225 lost 0.82% by the end of trading to 18,274.99 points, while the Topix index slipped 0.75% to 1,466.96.

Hong Kong's Hang Seng is down 0.67%, at 22,406, despite the opening of a new trading link with the mainland's Shenzhen Stock Exchange. 

And South Korea's Kopsi has slipped 0.28% to 1,965.31 points. 

Today Programme
BBC Radio 4

Image source, Reuters

Ferdinando Giugliano, economics commentator at La Republica, says the focus will be on how Italy's troubled banks fare amid the political uncertainty. 

A €5bn rescue operation of Monte Dei Paschi, the world's oldest bank, was waiting until the referendum result, he tells Today. 

With Renzi's defeat, the "whole operation is up in the air", he says. "It's very hard to see the €5bn coming in." The crucial question now will be what the government - when a new one is formed - decides to do.   

"From today this becomes a banking story," Megan Greene, chief economist at Manulife, adds. 

There's a risk of contagion to the other weak Italian banks, and possibly beyond Italy to the rest of the EU.

Michelle McGrade, chief investment officer at TD Direct Investing, expects Europe's markets will be down this morning.

This is not just because of the Italian referendum, but because of concerns over what might happen to Europe as a whole and the knock-on effects on Brexit negotiations.

Markets will be looking to see whether other EU countries can reform themselves, so we don't see more populist upheavals, she says. All eyes will be on Trump too.

She expects Italian bank shares will take a further hit today in particular, Italian government bonds too.

The euro fell to a 20-month low against the dollar overnight when Matteo Renzi quit as Italian prime minister. It's since pared some of those losses, but is still down by about 1%.

Simon Smith, head of research at currency trader FXPro, tweets:

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Image source, Reuters

The outlook for the Italian economy is "much more complex", says Lorenzo Codogno, a former chief economist at the Italian Treasury.

He doesn't expect an early election, or a referendum on the euro. But he tells Wake up to Money that the country's political gridlock will continue until at least 2018, as a new caretaker government struggles to keep the peace. 

During that time fears will mount over the country's indebted banks, and vital reforms will be hard to achieve. 

All that is likely to hold back Italy's nascent economic recovery. 

"I think this combination of factors will mean not particularly brilliant growth," he says.  

Image source, Thinkstock

The number of agency workers is set to reach one million by 2020 if current growth trends continue, according to Resolution Foundation research.

Describing agency workers as "the forgotten face" in the debate around insecure work, the think tank estimates a full-time agency worker gets £430 less than an employee in the same role.

The current number of 865,000 has grown by 30% since 2011, it said.

Read more.

The euro fell sharply against the dollar after Italian Prime Minister Matteo Renzi suffered a heavy defeat in Sunday's referendum.

The fall continued after Mr Renzi announced his intention to resign. At one stage the euro hit $1.0507, its lowest level since March 2015.

But it rebounded from that low and a short while ago was at $1.056, down by 0.97% from Friday's close.

Analysts say that there is caution among investors but not panic.

Read more.

Welcome to another week of Business Live. Today you'll have two Dans - Thomas and Macadam - guiding you through the latest news and reaction from the markets.

Coming up, there will be more on Italian Prime Minister Matteo Renzi's shock resignation yesterday, and what it means for business.

We'll have results from Purplebricks and Serco.

And we'll have the latest stats from the Society of Motor Manufacturers & Traders and EEF - the Manufacturers' Organisation. 

Do stick around if you can.