LONDON, May 9 (Reuters) - Tha gap between Italian and German borrowing costs hit its widest level in nearly six weeks on Wednesday on the possibility that a coalition of Italian anti-establishment parties would come into power.
The prospect of an Italian government composed of the 5-Star Movement and the far-right League — considered by many investors to be an alarming scenario before the March 4 election — is now looking increasingly likely.
The Italy/Germany 10-year government bond yield spread widened five basis points immediately after news that 5-Star and the League had said they were holding last-minute talks to try to clinch a coalition deal.
The spread widened to 132.7 basis points, its widest since March 29.
Italian 10-year bond yields rose two basis points to 1.88 percent. Other euro zone government bond yields were either flat or lower on the day. (Reporting by Abhinav Ramnarayan; editing by Sujata Rao )