Emerging stocks hit a two-month low yesterday as Italy’s mixed election results stirred fears of a resurgence of problems in the euro zone.

MSCI’s emerging equity index fell more than 1 percent, as the political stalemate in Italy, the euro zone’s third-largest economy, stirred fears of another flare-up in the crisis that has brought the bloc to the brink of collapse before.

“The good sentiment turned around abruptly as a clear vote against the austerity government of Mario Monti resulted in an inconclusive election outcome in Italy,” SEB said.

Hungary’s forint fell 1 percent ahead of an expected rate cut later in the day.

Russian shares and the rouble fell into the red for 2013 after the deputy finance minister said the economy contracted 0.3 percent in January. – Reuters