Investor confidence in Italy plunges on uncertainty

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A premier-designate tapped to form a non-political government of technocrats is expected to present his Cabinet list to President Sergio Mattarella, but investors appeared dubious, sending markets plunging.

The Italian stock market opened down 1.8 percent on Tuesday and the spread between the Italian 10-year government bond and the benchmark German bund rose to 230 points, the highest level since October 2013, with interest rates at 2.9 percent.

The premier-designate, former IMF official Carlo Cottarelli, meets Mattarella to present his ministerial picks later Tuesday, two days after an attempt by two populist forces to form a government foundered on the president's rejection of their anti-euro economy minister.

Facing firm opposition, Cottarelli's government is likely to fail confidence votes later in the week, pushing Italy back to elections in the fall.