LONDON (Reuters) - A modest recovery in Italian stocks failed to lift European equities more broadly in early trading on Wednesday, as investors mulled the possibility of fresh Italian elections as early as July.
The pan-European STOXX 600 (STOXX) index was down 0.1 percent by 0722 GMT, while Germany's DAX (GDAXI) rose 0.2 percent.
Late on Tuesday sources said that Italy may hold repeat elections as early as July after the man asked to be prime minister failed to secure support from major political parties for even a stop-gap government.
Worries over Italian politics and the country's future in the European Union have hit European stocks this week, with Italy's benchmark FTSE MIB (FTMIB) touching its lowest level since July 2017 on Tuesday. Italian banks (FTIT8300), which dropped 4.7 percent in the previous session, rose 0.6 percent.
Though Italy's index recovered some ground with a 0.5 percent rise on Wednesday, Italian stocks are down 4 percent so far this week and have given up all of 2018's gains.
Elsewhere concerns over U.S.-China trade relations also soured the mood after the U.S. said on Tuesday that it still holds the threat of imposing tariffs on $50 billion of imports from China.
While the focus remained firmly on politics, shares in Vivendi (PA:VIV) were the biggest individual fallers, down 3.8 percent after its subsidiary Canal+ was left empty-handed in a crucial soccer broadcasting rights auction in France on Tuesday.
