Moody’s on Wednesday placed a dozen Italian banks and several major companies on negative ratings watch, as the country’s political problems drag on.
The ratings agency said it was putting Intesa Sanpaolo, UniCredit and Mediobanca under surveillance after already placing Italy’s Baa2 rating on review for a possible downgrade over the crisis.
Fuel giant Eni, postal service Poste Italiane, public TV network RAI and gas companies Snam and Itaglas were also put under negative watch.
The eurozone’s third largest economy has been in political turmoil since a March 4 general election failed to throw up a clear winner.
A populist coalition of the Five Star Movement and the nationalist League looked possible, but President Sergio Mattarella rejected their pick for economy minister, the eurosceptic financier Paolo Savona. 
Financial markets have been on a rollercoaster ride over the past few days, but Milan stocks closed up 2.09 percent on Wednesday, and the bond market strengthened slightly.
But investor doubts over Italy’s financial stability remain, with the country struggling under a debt mountain of 2.3 trillion euros.