Milan, December 11 - Italian stocks strengthened while the bond market tread water Tuesday, just one day after investors showed their discomfort with changes coming to the nation's government. Investors began adjusting to the idea of imminent Italian elections and the uncertainty that brings, and rejoiced in stronger-than-expected results from a German confidence index. After losing 2.2% on Monday's session, the Milan Stock Exchange regained most of that ground Tuesday as the FTSE Mib index closed 1.5% higher on the day to reach 15,585 points. Investors began the week on a shaky note, rattled by Premier Mario Monti's announcement Saturday that he will soon resign. Monti's technocratic government is credited with having saved Italy from a debt-induced disaster, and the upset caused by his imminent resignation highlights the continuing fragility of Europe's economy. Making matters worse, discredited former premier Silvio Berlusconi announced that he would again campaign to run Italy. Despite that, the spread between Italy's benchmark 10-year bond and its German counterpart closed Tuesday at 340 basis points, slightly narrower than the day before. The yield on Italy's 10-year paper was 4.73%. That suggested some calm has returned to bond markets, where at one point in Monday's trading the spread between Italian and German bonds spiked above 360 basis points before closing at 351 points. Still, the spread now sits significantly wider compared with last Friday's close of 323 points, suggesting markets remain nervous about the threat of renewed political chaos in Italy. Other European markets were buoyed by the results of a confidence index released Tuesday by the ZEW Center for European Economic Research in Mannheim. Its index of German investor and analyst expectations, which aims to predict economic developments six months in advance, climbed to 6.9 this month from a -15.7 in November. Since Germany boasts Europe's largest economy, its health matters. As a result, Frankfurt's DAX ended the day 0.94% higher at 7,589.75 points, while London's FTSE 100 closed trading slightly higher at 5,924.97 points, Paris's CAC 40 gained 0.94% at 3,646.15 points, and Spain's IBEX 35 ended the day 0.73% higher at 7,920.90 points.