European equities deflate as investors await Italian government

Europe's stock markets slid Monday as investors awaited the formation of a right-wing coalition government in Italy.

Milan's benchmark FTSE MIB index was the worst performer in Europe, recoiling 0.6 percent.

Frankfurt, London and Paris each shed about 0.2 percent in value.

Later on Monday, a deeply Eurosceptic far-right party and an anti-establishment group are set to unveil a coalition government agreement and name a new Italian prime minister, ending over two months of political deadlock.

The leaders of the anti-immigrant League party and Five Star Movement will meet the Italian president to share details of a government programme for the Eurozone’s third largest economy.

"An optimistic start to trade throughout Asia has failed to translate into a strong start in Europe," noted IG Markets analyst Joshua Mahony.

He added: "A right-wing coalition in Italy has done little to boost markets, with Europe failing to follow their Asian counterparts higher despite the prospect of a positive conclusion to US-China trade talks."