MILAN, Feb 25 (Reuters) - Italian shares lost all of their earlier gains on Monday after projections put the centre right ahead in the Senate, contradicting initial polls from a key parliamentary election.
The Milan blue-chip index was flat at 1550 GMT, having earlier gained nearly 4 percent.
The spread between Italian 10-year government bonds and equivalent German Bunds widened back to 277 basis points after earlier dipping below 255 basis points.
Initial telephone polls after voting ended on Monday had put the centre-left ahead in both the lower house and the Senate (upper house). The varying forecasts raised fears of a hung parliament in which no coalition could command a stable majority in both houses.