Italy might have just become a smaller concern for investors after the constitutional court ruled on changes to the country's electoral law.

Analysts believe that a court ruling, published Wednesday, will make the Italian electoral system more proportionate and thus, less likely, to give room for a government led by the populist and anti-euro Five Star Movement (M5S).

"Even if the anti-Euro M5S emerges as the largest party in the next elections, it will not obtain a parliamentary majority given the strongly proportional system," Wolfango Piccoli, co-President of Teneo Intelligence, said in a note.

"As a result, the M5S would be able to take over power only if it strikes a coalition deal with other parties. This is a near-impossible task for M5S given its intransigence in dealing with other political forces in order to preserve its 'anti-establishment' identity," Piccoli added.

Italy is being governed by an interim executive since the resignation of former prime minister Matteo Renzi.

President Sergio Matarella wants the electoral law approved before calling for new elections.

Like in other European countries, support for anti-euro movements has risen since the 2008 financial crisis – something that investors interpret as a worry when looking at opportunities in Italy.

But the increased proportionality in the Italian system makes it now harder for populists to take over the next government.