Italy's leading financial index slides by 0.44%
Spread between Italian, German bonds closes at 223 basis points27 January, 19:46
Uncertainty about weakness in China's massive economy, as well as ongoing fears about the United States Federal Reserve's decision to gradually reduce stimulus, also weighed on markets.
The FTSE Mib ended the trading day down by 0.44% at 19,273 points, pulled lower by concerns over Italian bank capitalization.
In one key example, Banco Popolare shed more than 14% early in the day before market regulators halted trading.
On the Italian bond market, the spread between Italy's benchmark 10-year bond and its ultra-safe German counterpart closed at 223 basis points, basically unchanged from last Friday's close, with the yield on Italy's 10-year paper ending trading at 3.89%.
The spread between lending rates in the two countries is an important indication of investor faith in the Italian economy.
On other European markets Spain's IBEX 35 fell by 1.12%, closing at 9,758.40 and Frankfurt's DAX slid lower by 0.46%, closing at 9,349.22 points.
In Paris, the CAC 40 slipped by 0.41%, ending trading at 4,144.56 points, while in London, the FTSE index of leading British shares fell by 1.70% on the day, closing at 6,550.66.