Milan, February 26 - Investors hammered European markets Tuesday after inconclusive Italian elections led to new worries that the eurozone crisis may once again reignite. The first signs of the massive sell-off that was to hit Europe were seen at the open of Asian markets Tuesday, with Japan's Nikkei 225 shedding 2.3% to close at 11,398.8. In Europe, Italy's FTSE-Mib led losses, closing down 4.9% at 15,552.2, followed by Spain's IBEX 35, down 3.2% at 7,980.7. Germany's DAX and France's CAC 40 also ended the day in the red, down respectively 2.3% at 7,579.1, and 2.7%, at 3,621.9. London's FTSE 100 was the best performer in Europe, closing down 1.3% at 6,270.4. Renewed investor worries that Italy would have difficulty meeting its debt obligations pushed up yields on the country's 10-year bonds, which jumped nearly half a percentage point in the early afternoon, when they traded at 4.84%, their highest level this year. Bond yields ended the day at 4.9%. Meanwhile, the spread between Italian and German debt, an indicator of investor confidence in Italian government paper, jumped to 344 basis points from Monday's close of 293 points. The spread peaked at 350 points earlier in the afternoon. Spanish bonds also felt the pain, with yields more than 0.2% higher, while Portuguese and Greek bonds also suffered. Italy's banks - which suffer most when borrowing costs rise - were the loss leaders in Milan, with some being suspended for excessive volatility. Shares in banking giants Unicredit and Intesa Sanpaolo ended the day down 8.5% and 9.1%, respectively, with Italy's stock-market regulator suspending short-selling shares in the latter. Meanwhile, Banco Popolare closed down 10.3%, Mediobanca lost 8.6% and BPM closed down 5.7%.