“It’s clearly an authoritative government,” said Andrea Cuturi, vice chairman of Anthilia Capital Partners. “Letta is competent and has experience. The key issue is, however, how long will this government last and what it will be able to do. This will become clearer in the coming weeks.”

An inconclusive general election at the end of February left Italy, which has the euro zone’s third-largest economy after those of Germany and France, at the mercy of three main political forces, threatening investor confidence and holding up efforts to end a recession.

Mr. Letta, 46, a moderate center-left politician and one of the youngest Italian prime ministers ever, was able to put together a cabinet after striking a deal with the center-right People of Freedom party, led by former Prime Minister Silvio Berlusconi, and with the centrist Civic Choice Party, led by another former prime minister, Mario Monti.

Moody’s said Friday that it had kept Italy’s sovereign debt rating at Baa2 because of the reasonably low current cost of funding and the fact that the Italian budget would be in surplus if debt service were excluded. But the rating agency maintained its negative outlook for Italian sovereign debt because of the prolonged economic crisis.

Michael Hewson, analyst at CMC Markets, said the formation of the government was “a positive development,” but he added that he was “not constructive” on European equities, which he said were “still well below the highs.”

“To be quite honest, while you could argue that Italy’s got some scope to go up, that’s only because it’s been sold off,” he said.