After Italy emerged from elections on Tuesday with no clear winner, world financial markets reacted nervously as investors worried that one of Europe’s biggest economies would be unable to build a governing coalition, thus delaying economic reforms. The results indicate a rejection of the tough austerity approach of the Mario Monti government. A center-left coalition led by Pier Luigi Bersani appears to have won a narrow victory in the lower house of parliament, while the Senate looks split with no party in control.

As stock markets in Europe, Asia and the US fell, European leaders urged politicians in Italy to quickly build a government to continue to enact reforms to lower the country’s high debt and spare Europe another spike in its four-year financial crisis.

Allies of German chancellor Angela Merkel were disappointed with Monti’s debacle and France’s socialist FM expressed “worry”. “It’s a leap into the unknown, which bodes poorly for Italy and the rest of Europe,” said the Spanish foreign minister.