Spain and Italy weigh on European indexes amid nerves over Greece
* Spanish and Italian stocks fall
* Greek banking shares bounce as gov't says it won't appoint execs
* FTSEurofirst 300 up 0.2 pct after late recovery
By Francesco Canepa
LONDON, Feb 2 (Reuters) - Spanish and Italian shares weighed on European equity indexes on Monday as investors grew more worried about the possible ramifications of Greece's debt negotiations for the rest of the euro zone periphery.
In its first week in office, Greece's new government has made clear it wants to end its existing funding arrangement with the European Union, European Central Bank and International Monetary Fund "troika" when it expires on Feb. 28.
Investors had taken the view that the impact of a Greek crisis could be contained. But the prospect of tough negotiations between Greece and its lenders is starting to sour the appetite for assets in countries such as Spain and Italy, where anti-austerity parties have also gained popularity.
Analysts at Goldman Sachs on Monday withdrew their preference for Italy's FTSE MIB index and Spain's Ibex , which closed down 0.1 percent and 0.7 percent respectively, over the STOXX Europe 600.
"We recommend closing tactical pro-cyclical exposures in peripheral ... equities (overweight MIB and IBEX vs. SXXP) until more clarity emerges about the direction ongoing negotiations between the new Greek government and the European authorities are taking," they said in a note. Continuación...