European shares edge higher, led by STMicro

LONDON Dec 10 (Reuters) - European stocks managed to eke out a slight gain on Monday, led by French-Italian company STMicroelectronics after it announced plans to quit a loss-making joint venture.

The firm was up 4.4 percent by the close, leading gainers on the provisionally 0.1 percent higher FTSEurofirst 300 and helping the French CAC outperform regional peers on news it will exit a mobile chip tie-up with Ericcson.

The late move into positive territory was tentative, however, after markets across the region had been hit earlier in the day by the news of fresh political turmoil in Italy.

News over the weekend that Italian Prime Minister Mario Monti planned to resign once the 2013 budget is passed, raised worries that had been bubbling under the surface over political and financial instability in the euro zone.

"There is a clear risk whatever the outcome (of the elections), in the end, the market will be forced into thinking that things are not under control and then the European Central Bank has to intervene," said Nicola Marinelli, portfolio manager at Glendevon King Asset Management.

As a result, Italy's FTSE MIB fell 2.2 percent, while the spread between 10-year Italian debt and German Bunds widened highlighting concerns within the bond market.