Markets nervous as Italy faces crucial vote

US and Asian markets were mixed overnight as fears Italy could become the next victim of the eurozone crisis grew.

Wall Street managed to close higher, with the Dow Jones index closing slightly up at 12,068, a 0.71% increase, while the S&P 500 edged up a similar 0.63% to reach 1,261.

However, with speculation growing Italy's PM Silvio Berlusconi may resign, Asian stock markets were more muted.

The Nikkei 225 closed down, shedding 1.27% to 8,655, while the Hong Kong Hang Seng index edged up slightly by 0.25% to 19,727.

Asia is expected to gain on expected monthly inflation data from China tomorrow, with price increases expected to moderate reinforcing hopes that the government will loosen its tight monetary policy.

However, all eyes are now on Italy where Berlusconi will face a crucial vote on the budget today. Yesterday Berlusconi dismissed reports that he was planning to step down.

Borrowing costs for Italy's government have reached record highs over fears the country will default on its huge level of debt.

London opened slightly up this morning with the FTSE 100 gaining 0.53% to 5539.

Europe also showed marginal gains, seemingly buoyed by progress in Greece. France's Cac 40 and Germany's Dax rose 0.67% and 0.96% to reach 3124 and 5985 respectively.