Matteo Renzi resigns as Italy's premier

Prime Minister Matteo Renzi formally resigned Wednesday, but the president asked him to stay on until a new government is in place.

The resignation comes after a referendum in which Italians rejected his proposed constitutional changes.

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.

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.

Italian vote, Renzi resignation confuses global markets

President Sergio Mattarella asked Renzi to stay on while he holds consultations with political parties to decide next steps, according to a statement from the president's office.

The consultations will start Thursday and are set to end on Saturday, Reuters reported.