European shares tentative awaiting Italy election outcome

Last Updated: Mon, Feb 25, 2013 08:10 hrs

LONDON, Feb 25 (Reuters) - European shares cautiously continued their recovery from multi-month lows early on Monday as investors kept a close eye on elections in Italy, the outcome of which could impact economic reform.

By 0803 GMT, the FTSEurofirst 300 was up 1.97 points, or 0.2 percent at 1,167.55, in tandem with overnight gains in Asia and a bullish finish in the U.S. on Friday.

The euro zone blue chip index climbed 1 percent to around 2,656 points, extending its bounce off near three-month lows hit last Thursday.

Achim Matzke, European stock indexes analyst at Commerzbank, said he sees euro zone blue chips stocks holding in a tight range until the outcome of the election in Italy is known.

"We have support around 2,580 and resistance around 2,675 and I expect the market to trade inside that range awaiting the results out of the elections Italy," he said.

The outcome of the elections in Italy remained one of the most unpredictable in years as polls opened for the second day of voting on Monday, with a surge in protest votes fuelling fears of an unclear outcome that could hamper economic reform.

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