Italy's president Giorgio Napolitano cancelled his attendance at a political conference on Thursday, because of a "disturbing" political development that required his attention, according to various media reports in Italy and the U.K.
Reacting to the growing political confusion over the state of the country's fragile coalition government, Italy's FTSE MiB index was trading down 1.8 percent and the yield on Italy's benchmark 10-year bond rose more than 80 basis points to 4.46 percent.
"I would have participated in today's conference if yesterday there had not been a sudden political development that is institutionally disturbing and which requires all my attention today," Napolitano wrote in a note to the conference organizers, Reuters reported on Thursday.
On Wednesday evening, members of Silvio Berlusconi's center-right party renewed threats to resign if their leader was expelled from parliament due to a conviction for tax fraud when the Italian Senate votes on the matter on October 4.
(Read more: Is the net closing in on 'Houdini' Berlusconi?)
Napolitano's cancellation follow Italian prime minister Enrico Letta telling CNBC that "stability" was his priority for the government.
He said he was working hard to bring the country back on the path of economic growth and stability while tackling tensions in his fragile coalition government over delayed tax increases and reforms.