- Political uncertainty weighs heavy on Italy and Spain
- Eurozone producer prices decline
- Rangold Resources lifts on annual profits hike

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Stoxx 600: -1.49%

European equities tumbled as investors raised fears over political instability in Italy and Spain.

Italy's banks fell in Milan trading as uncertainty weighed heavy ahead of the country's elections on February 24th and 25th.

The nation's biggest bank UniCredit fell 7.51% to €4.29 at 16:24, while the third largest lender Banca Monte dei Paschi SpA dropped 4.57% to €0.22.

The news comes as Italy's former leader Silvio Berlusconi gained on front-runner Pier Luigi Bersani for the upcoming elections, according to a SWG Institute survey last week.

He promised voters he would refund a property tax paid last year. However, Prime Minister Monti said Berlusconi was buying votes with money Italians had to turn over to cover up the shortfall the former leader left in the public accounts.

Europe's other weak economy, Spain, was in the spotlight as Prime Minister Mariano Rajoy fought off corruption allegations. He denied the claims made in Spanish newspaper El Pais which published images of documents allegedly showing Rajoy making secret payments to his Popular Party members.

Rajoy assured his government would overcome the accusations and was committed to reforms to steer Spain away from the financial crisis.

"The government is stable. The PP has a majority," Rajoy said, according to press coverage. "It's carrying out its agenda based on reforms."

Rangold gains on profits rise

Swatch Group soared 5.91% after the watchmaker reported a 26% increase in 2012 net income to 1.6bn francs, beating the average analyst estimate of 1.49bn francs.

Randgold Resources topped the FTSE 100, advancing 3.12% after the gold explorer posted a 16% increase in annual profits.

Royal Imtech plunged 47.81%, the largest decline since 1989, after the Dutch provider of infrastructure for stadiums said it may need to book writedowns of at least €100m due to alleged irregularities at its Polish business.

Julius Baer Group fell 3.1% to 36.41 francs, after a wealth manager reported falling revenue margins.

Eurozone producer prices drop

Eurozone producer prices fell by 0.2% month-on-month in December, in line with expectations.

The Sentix index of Eurozone investor confidence improved to -3.9 points for February (Consensus: -1.7) after a reading of -7.0 for the previous month.

Euro/dollar declines

The euro/dollar was down 0.73% to the 1.3541 dollar mark.

Front month Brent crude futures plunged by 0.664 dollars to the 115.990 dollar level on the ICE.

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