Italian shares drag on European indexes, Rolls-Royce slumps
* Italian shares cut losses as PM crisis seen receding
* Nestle weighs, warns on slower emerging market demand
* Rolls-Royce warning unsettles defence sector
* FTSEurofirst index closes 0.1 percent lower
By Atul Prakash
LONDON, Feb 13 (Reuters) - Italian shares trimmed most of the day's losses on Thursday on expectations that political uncertainty in the country will be resolved and European indexes tracked the recovery to close nearly flat.
The Italian share index started trimming losses after centre-left leader Matteo Renzi - a supporter of economic reforms emerged as a frontrunner to replace Prime Minister Enrico Letta.
After the market close, a statement from the premier's office said Letta would tender his resignation on Friday after his Democratic Party called for him to step aside to make way for a new government.
"There appears to be some progress in the Italian political platform and with that progress, investors are feeling more confident and certain that there won't be any stalemate like we saw the last time," Lorne Baring, managing director, B Capital Wealth Management, said. Continuación...