World markets retreated Tuesday as a big vote for anti-austerity parties in Italy's elections left the eurozone's third biggest economy in political deadlock, sparking fears of a revival of the region's debt crisis.

European stock markets were sharply lower, led by a 4% plunge on Italy's index of leading shares. Italy's borrowing costs increased, as the yield on its 10-year bond moved up towards 5%, triggering similar moves in other weaker eurozone states such as Spain and Portugal. The euro fell to just above $1.30.

Final results showed the center-left coalition of Pier Luigi Bersani winning by a very slim margin in the lower house of parliament but unable to control the Senate after a strong showing by former Prime Minister Silvio Berlusconi and a protest movement led by comedian turned politician Beppe Grillo.