* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr (Updates throughout)
LONDON, Feb 10 (Reuters) - A mounting coronavirus death toll pushed euro zone bond yields lower on Monday, while Ireland's borrowing costs showed little reaction to election results that point to a shift in its centre-right dominated politics.
Italy was also in focus after rating agency Fitch maintained its negative outlook on the country's BBB credit rating, noting its political fragmentation, high net external debt and weak banking sector asset quality.
In Ireland, Sinn Fein, the former political wing of the Irish Republican Army which has recast itself as the main left-wing party, secured the largest share of votes in the election, in what is being seen as a seismic shift from the country's century-old, centre-right duopoly.
While Sinn Fein said it wanted to form a government with other parties, Fianna Fail has already dismissed talk of a coalition with Sinn Fein as "completely premature".
While the outcome sent shares in Irish banks tumbling as much as 7%, 10-year sovereign bond yields slipped 1.5 basis point on the day at -0.12%. Five-year Irish credit default swaps rose 1 basis point to 22 bps.
Analysts said the European Central Bank's asset purchase programme alongside Ireland's own robust growth backdrop were insulating it from the threat of political uncertainty.
"Beyond politics, fundamentals, supply and near-term Brexit certainty should all be a boost for Irish bonds," Natwest analysts said, noting their analysis showed longer-dated Irish debt to be around 4 bps cheaper than peers.
"We hold our call to be long 10-year Ireland versus Germany, targeting 25 bps (spread)," they told clients.
The spread is currently around 28 bps.
Broader market focus remains trained on the spread of the coronavirus. The World Health Organization's top emergency expert said there had been a stabilisation in the number of new cases reported from the epicentre of the virus in recent days.
"We would expect the safe-haven safety bid to fade a bit, Commerzbank strategist Rainer Guntermann said, predicting volatile trading in the coming days.
Despite a stabilisation in the rate of new infections, the death toll from the coronavirus outbreak surpassed the global SARS epidemic of 2003 and continues to raise concerns about the growth outlook in China.
Fears that China would not be able to contain the outbreak sent euro zone investor morale lower for the first time in four months in February, the Sentix index showed
Most 10-year euro zone yields were down 1-2 bp with Germany's benchmark at -0.39%, well off 3-1/2 month lows at -0.447% hit last week. It did not react to news that Annegret Kramp-Karrenbauer, the woman who had been expected to be Germany's next chancellor, had decided not to run for the role.
Italy's 10-year bond yield was flat at 0.95% (Reporting by Yoruk Bahceli and Sujata Rao; Editing by Catherine Evans and Alison Williams)