European markets were mixed Wednesday morning, amid a deepening political crisis in the euro zone's third-largest economy.
The pan-European Stoxx 600 was flat during early morning deals, with sectors and major bourses pointing in opposite directions.
Among national indexes, Italy's FTSE MIB recovered slightly Wednesday after registering sharp losses in recent days. Italy's political woes have roiled global financial markets amid news the prospect of snap elections in Rome could be framed as a de facto referendum on the country's role in Europe.
Europe's banking index led the losses, down over 0.7 percent as investors feared Italy's political convulsions could ultimately test the region's banking system. Credit Agricole, Close Brothers Group and Credit Suisse were the sectoral underperformers shortly after the opening bell, all down more than 1 percent.
Looking at individual stocks, Vivendi tumbled to the bottom of the European benchmark Wednesday after the French media giant lost out on rights to broadcast domestic soccer matches. The setback was thought to highlight the lack of growth prospects for Vivendi's Canal Plus TV arm. Shares of the firm were off 4 percent on the news.
Meanwhile, Belgium's Umicore was trading towards the top of the index after ING raised its target price for the global materials technology and recycling group. Its shares were around 2.5 percent higher.
Italy remains in the spotlight
In Asia, equities tumbled lower Wednesday as Italy's power struggle rippled across global financial markets. MSCI's broadest index of Asia-Pacific shares, excluding Japan, was off more than 1.5 percent on the news.
Meanwhile, the reverberations of Italy's political upheaval also prompted a sharp downturn on Wall Street. U.S. stocks were led lower by declines in the banking sector as the Dow Jones industrial average slipped almost 400 points, while the S&P 500 and Nasdaq also finished lower.
Tuesday's losses marked the third straight trading session of negative numbers for the Dow and S&P 500, both of which suffered their worst day on a percentage basis since April 24.
Back in Europe, political developments in Italy were widely expected to remain in the spotlight Wednesday. Investors were fearful that euroskeptic parties in Rome could frame a new election as a de facto referendum on Italy's role in Europe.
Italy has been without a government since an inconclusive vote in early March, with the president finally nominating former International Monetary Fund official Carlo Cottarelli as interim prime minister until a snap poll is held sometime between September and spring 2019.
On the data front, the euro area is scheduled to publish industrial sentiment, services sentiment, economic sentiment and business confidence data for May at around 10 a.m. London time.
— CNBC's Thomas Franck contributed to this report.
