The Italian general election has turned into a neck-and-neck race between right and left after the earliest projections contradicted exit polls showing the centre-left heading for victory.

The first estimates based on the actual count showed Silvio Berlusconi's centre-right alliance ahead of Pier Luigi Bersani's centre-left by 31% to 29.5% in the upper house or Senate. The unexpected turnaround sent the interest rate on Italy's debt soaring as traders took fright at the prospect of a divided parliament with different majorities in the upper and lower houses.

One of the projections made Beppe Grillo's Five Star Movement (M5S) Italy's leading party. However, because it is running alone and not in a coalition, it lagged the two big alliances.

Earlier, exit polls had indicated that the centre-left, led by Bersani's Democratic party (PD), was comfortably ahead by around six percentage points. They also showed an apparent slump in support for the centrist bloc of Mario Monti, the outgoing technocratic premier, that was borne out in the subsequent projections.

An exit poll for Rai, the state broadcaster, had put the centre-left bloc of the PD and its allies on 35-37% of the vote in the lower house of parliament and 36-38% in the Senate.

The centre-right bloc led by Berlusconi's Freedom People party was in second position, with 29-31% and 30-32% in the Senate. The same poll put the M5S in third, and Monti's centrist grouping significantly behind in fourth. The results were roughly echoed by a separate exit poll for Sky television.

Observers cautioned against setting too much store by the exit polls, which have proved unreliable in the past.

The fate of the Senate is less clear. The result will rest on key regions such as Lombardy, where the centre-right – in alliance with the Northern League – could win and deprive the centre-left of seats it would need for a majority. Sky's exit poll said the Lombardy result was tied.

Another crucial factor will be whether Monti's centrist bloc manages to gain enough Senate seats to be of use to the PD as a potential governing ally.

Turnout, according to exit polls, was significantly down on the last election in 2008. The parliamentary elections will mark the end of Monti's technocratic government, brought in at the end of 2011.

The fractured nature of the political landscape and complexities of the electoral system have raised fears that recession-mired Italy, which has had a decade of near-economic stagnation and more than a year of punishing austerity, could end up with a deadlock in which no strong government is possible.