Juncker roots for Italy amid political standoff

In a move to ease concerns over Italy's political standoff, European Commission President Jean-Claude Juncker said Tuesday he is convinced that the country will continue on its European path.

"Italy's fate does not lie in the hands of the financial markets. Regardless of which political party may be in power, Italy is a founding member of the European Union that has contributed immensely to European integration," Juncker said in a statement.

"The Commission is ready to work with Italy with responsibility and mutual respect. Italy deserves respect," he added.

Two Italian populist parties were calling for protests to be held in the next days, as prime minister-designate Carlo Cottarelli is at work to outline a technocrat cabinet to lead the country until early elections.

Anti-establishment Five Star Movement (M5S) and far-right League appealed on their base of supporters to take to the streets across the country, after their bid to form a government failed over the weekend.

Their attempt collapsed after Italian President Sergio Mattarella refused to confirm Paolo Savona, a Eurosceptic economist, as finance minister, as the two parties had proposed.

That veto brought about the resignation of the M5S-League's PM-candidate, law professor Giuseppe Conte, and Mattarella gave the mandate to Cottarelli to form a technical cabinet, in order to end a stalemate that lasts since inconclusive elections on March 4.

Financial markets are jittery over the political standoff in Europe's fourth-largest economy,with Italy's FTSE MIB falling 2.65 percent on Tuesday.

Other European stock markets also closed sharply lower.

Meanwhile, the yield on the benchmark ten-year Italian government bonds has risen precipitously in recent days.

Bond yields are a measure of investor confidence in a country's economic prospects, with a higher yield indicating more perceived risk.