Kim Hjelmgaard

USA TODAY

Italy's rejection of a plan for constitutional changes and the resulting resignation of Prime Minister Matteo Renzi plunged global markets into disarray Monday amid fresh doubts about European political stability.

Asian shares tumbled after Italians voted "no" in a referendum on the changes that Renzi said would reduce bureaucracy and make it easier to pass legislation aimed at kick-starting the country's moribund economy.

In Europe, markets mostly shrugged off the development. Stock futures on Wall Street were higher, with the Dow futures up 0.4% before the market opened in New York.

The referendum outcome raises questions over whether Italy will stay in the European Union and keep using the euro. It also emboldens Italy's Five Star Movement, a populist opposition party led by former comedian Beppe Grillo, who has campaigned with an anti-establishment, anti-austerity and anti-corruption message.

In Tokyo, the Nikkei 225 index retreated 0.8% to 18, 271.99. China's Shanghai composite index lost 1.2% to 3,204.71. The euro plummeted to a 21-month low against the dollar before recovering. The shared currency was recently down 0.3% to $1.0633. Europe benchmarks were calmer, but Italy's FSTE MIB index still fell 1% to 16,918.63. Germany's DAX index rose 1.4% to 10, 658.82.

About 60% of Italian voters rejected the constitutional revisions. Italy’s president will now decide whether to accept Renzi’s resignation.

"This (outcome) raises the political risks in Italy and may weigh on its troubled banking sector," Citigroup analysts said in a research report. Italy is the third-largest economy in the eurozone. It also has one of the economic bloc's most troubled financial sectors. Its banks are over-indebted and face extreme liquidity challenges.

The voter result hit Italy’s sovereign debt. Spreads on Italy’s 10-year sovereign debt rose to 2% from 1.7% on Dec. 1. In April, these bond spreads were at a record low 1%.

Italy's Renzi to resign after losing reforms referendum

While the "no" vote was a rebuke to Italy's political and financial establishment, it also reflected an opportunity for the Five Star Movement's Grillo to capitalize on discontent with Renzi. The Italian premier had made it clear that the referendum was equally a confidence vote on his 2½ years in office.

"I lost, and the post that gets eliminated is mine," Renzi said in a speech early Monday. He said he would hand in his resignation to President Sergio Mattarella in the afternoon. However, Mattarella is not obligated to accept it and could instead ask Renzi to take part in an interim government until elections are called.

"Arrogance lost, from which we’ll learn many things in forming our team for government and our platform," said Luigi Di Maio, a Five Star politician. "We’ll be working on a government of the Five Stars; we’ll involve the energies and the free persons who want to participate."

In Austria, left-leaning Alexander Van der Bellen defeated right-wing rival Norbert Hofer on Sunday in a presidential election that was a rerun of a vote in May that was tainted by ballot irregularities. The victory was welcomed by politicians in Europe concerned by recent gains made by populists in Britain, France and the Netherlands.

Martin Schulz, the European Parliament president, said Van der Bellen's win was a defeat for "anti-European, backward-looking populism."