0823: London equities have begun the session with sharp losses, tracking the reaction on Wall Street to the current state of disarray of Italian politics after the unexpected ‘hung’ parliament which came out of this weekend´s polls. ‘The resulting situation is extremely complex and it is unlikely to lead to a stable coalition. Some sort of bi-partisan agreement to change the electoral law and then new elections seems the most likely outcome. In the meantime, uncertainty will remain high,’ write analysts at Unicredit this morning. Somewhat predictably, banks and miners are leading losses in the Footsie on Tuesday, although GKN and Whitbread are also moving lower. An auction of 8.75bn euros in Italian Treasury bills, towards 10:00, will be closely watched to better gauge the impact of the elections on the outlook for Italy and the Eurozone. Acting as a backdrop, the President of the Federal Reserve of Atlanta, Dennis Lockhart, indicated overnight that he believes that maintaining the current quantitative easing is appropriate, at least going into the second half of this year. Acting as a backdrop, the President of the US Federal Reserve, Ben Bernanke, will deliver an important policy speech tonight. Italian 10 year Treasury yields are rising by 36 basis points to 4.82%. FTSE 100 down 87 to 6,268.