Italy is facing a political deadlock following a general election, which has delivered no clear overall winner, and a hung Parliament. With all domestic votes counted, the Centre-left coalition has won a narrow victory in the Lower House. The Right-wing coalition led by the former Prime Minister Silvio Berlusconi may have a stronger presence in the Senate, but no party will have a majority. In Italy, control of both Houses is needed to govern. A protest movement led by comedian Beppe Grillo won a quarter of the vote. Analysts say the election results may usher in a damaging period of political instability in Italy and the results so far, have raised the prospects of a second election within months.

Uncertainty surrounding the results of the general elections in Italy, the third largest economy in the Eurozone, has unnerved stock markets. The Dow Jones index in New York fell by more than 1.5 per cent and markets also slipped downwards in the Far East.