(CNN) Populist parties have gained ground at the expense of establishment voices in Italy's parliamentary elections , which produced no clear winner as votes were being counted in the early hours of Monday.

The anti-establishment Five Star Movement is projected to have gained the most votes by a single party, while a center-right coalition looks set to hold the most seats in the country's senate.

According to national broadcaster RaiNews24, Five Star Movement led by 31-year-old Luigi di Maio is projected to gain over 32% of the vote, still short of the 40% needed to form a government.

Based on early vote count, the result looks like a win for the center-right coalition brokered by former Prime Minister Silvio Berlusconi , which collectively is projected to hold the biggest share of the vote -- 35.5%.

The result, which is comprised of Berlusconi's Forza Italia, Matteo Salvini's far-right League and the neo-fascist Brothers of Italy, means it will have the most seats in parliament, but 4% short of the 40% needed to avoid a hung parliament.

Berlusconi's Forza Italia is projected to receive 14%; the xenophobic and populist League, formerly known as the Northern League, also is expected to win 16%.

Berlusconi, a multi-billionaire, is currently not eligible to be Prime Minister because he has been convicted of tax fraud.

Poor showing for ruling party

The result is a blow for another former leader, Matteo Renzi, whose center-left group, comprised of his Democratic Party and the liberal More Europe party could only muster 23% between them.

The poor showing comes despite the ruling party projected to get the second-largest share of votes, 19%, for an individual party. Renzi, a center-left reformer, stepped aside in 2016 after the failure of a controversial constitutional referendum.

Italian political leaders seemed to be waiting for more results before weighing in on social media, with only the League leader Matteo Salvini tweeting "My first word: THANK YOU."

La mia prima parola: GRAZIE! pic.twitter.com/DRXiWVAHQp — Matteo Salvini (@matteosalvinimi) March 4, 2018

Bad news for EU unity

The poll is being closely scrutinized by European leaders who are concerned by the increasingly euro-skeptical sentiment and fearful of any instability in the Eurozone's third-largest economy.

If projections are accurate, the result means that Italy could be plunged into months of further political deadlock that could have broader implications for Europe -- both the League and the Five Star Movement are anti-EU parties.

One of the main issues in the election has been the surge in undocumented immigrants entering Italy, one of the main entry points into Europe from migrants from Africa and Asia.

The narrative around immigration took a darker turn after a man linked with neo-fascist political parties apparently went on a shooting rampage targeting African migrants in the town of Macerata. The incident fueled serious political debate about how the country is reconciling its fascist past.

Sweeping change

The populist parties' gains in the polls were not lost on US President Donald Trump's former strategic adviser Steve Bannon, who was in Rome to observe the elections.

Bannon said in an interview with Italy's Corriere della Sera newspaper that an alliance between the anti-immigrant League party and the populist Five Star Movement was "the ultimate dream."

"This election is crucial for the global populist movement" he said, saying it was an issue of "sovereignty" for Italians opposed to immigration.

Another far-right politician, France's Marine Le Pen, tweeted that the projected results signaled an anti-EU sentiment in the southern European country.

"The European Union is going to have a horrible evening," she said in the post.

L'Union européenne va passer une mauvaise soirée... 😃 MLP #Italie🇮🇹 #Elezioni2018 — Marine Le Pen (@MLP_officiel) March 4, 2018

Final results are expected at 2 p.m. local time (8 a.m. ET). The real work will begin once all the final votes are through and negotiations begin for a coalition.