Italian President Giorgio Napolitano has delayed naming Florence Mayor Matteo Renzi as prime minister following two days of talks with parliamentary parties.
Renzi is the choice of the the Democratic Party (PD) after it ousted existing PM Enrico Letter last week.
However, Renzi needs to win over the small New Center Right, which has been the PD's junior coalition partner and is demanding guarantees, such as in the areas of tax, jobs and family policy.
Despite the latest political turmoil, Moody's raised Italy's sovereign rating outlook to stable from negative on Friday.
Italian shares rose on the prospect of Renzi becoming PM, as he is thought to be more likely than Letta to be able to implement reform . (Previous)