European stocks declined the most in a month, trimming the best quarter in four years, as the U.S. faced the first government shutdown in 17 years and Italian Prime Minister Enrico Letta fought to save his administration.

The U.S. government is heading for its first partial shutdown since 1996 at midnight tonight, after a weekend with no signs of negotiations or compromise from either the House of Representatives or Senate to avert it.

The House voted 231-192 yesterday to tie an extension of government funding through Dec. 15 to a delay in many central provisions of President Barack Obama’s health-care changes. The Senate convened in Washington today and will probably reject the deferral to Obamacare.

A federal shutdown would reduce fourth-quarter economic growth by as much as 1.4 percentage points, depending on its length, economists said, as government workers from park rangers to telephone receptionists are laid off temporarily. The Office of Management and Budget estimated 30 days of shutdowns in 1995 and 1996 cost more than $1.4 billion, or $2.09 billion in today’s dollars.

In Italy, Letta said he’ll request a confidence vote for Oct. 2 to try to save his five-month-old administration after Silvio Berlusconi withdrew his support from the ruling coalition and pulled his ministers from cabinet. Yields on the nation’s 10-year bonds rose two basis points to 4.43 percent.

National benchmark indexes retreated in all 18 western European markets. The U.K.’s FTSE 100 and Germany’s DAX each lost 0.8 percent, while France’s CAC 40 Index slid 1 percent.

UniCredit, Italy’s largest bank, lost 1.3 percent to 4.71 euros. Intesa Sanpaolo, which appointed Carlo Messina as chief executive officer to replace Enrico Tommaso Cucchiani yesterday, fell 3.5 percent to 1.53 euros. Mediaset SpA, the broadcaster controlled by Berlusconi, dropped 4.5 percent to 3 euros, the lowest price since July 3.

A gauge of basic-resources shares fell 0.9 percent. Rio Tinto and BHP Billiton Ltd., the world’s biggest mining companies, retreated 1.4 percent to 3,023 pence and 1.1 percent to 1,820 pence, respectively. Anglo American Plc lost 1.4 percent to 1,518 pence.

A Chinese manufacturing gauge rose to 50.2 for September from 50.1 in August, according to a purchasing managers’ index from HSBC Holdings Plc and Markit Economics. The reading missed the preliminary estimate of 51.2. Fifty is the threshold between contraction and expansion.

Telecom Italia SpA rose 5.2 percent to 61 euro cents amid speculation Chief Executive Officer Franco Bernabe will resign. Bernabe plans to tell the board at a meeting scheduled for Oct. 3 that he’s ready to step down after losing the backing of Telco SpA, the Telefonica SA-led holding company that owns 22.4 percent of the carrier, according to a person with knowledge of the matter, who asked not to be identified because the deliberations are confidential.

U.S. stock futures slid as a stalemate over the federal budget increased the risk of a government shutdown.

Global Stocks:

Nikkei  14,455.8 -304.27 -2.06%

Hang Seng 22,859.86 -347.18 -1.50%

Shanghai Composite 2,174.66 +14.64 +0.68%

FTSE  6,463.85 -48.81 -0.75%

CAC  4,137.57 -49.20 -1.18%

DAX 8,582.95 -78.56 -0.91%

Crude oil $101.56 -1.27%

Gold $1330.00 -0.69%

European stocks declined , reaching a two-week low at the same time , due to the tense situation in the United States on the budget , as well as the struggle of the Prime Minister of Italy, Enrico Letta , to save his administration . Asian shares and U.S. index futures fell .

Note that the U.S. Senate has not held its meeting yesterday , and brought it to today . The meeting will consider the law on the financing of the government budget commitments have passed the House of Representatives. The U.S. Congress should soon adopt a budget legislation that allows the government to fulfill its obligations to the October 1 The temporary nature of the operation budget obligations caused by a conflict with the Democratic Republican administration because of the formation of priorities and spending budget. Recall that on Friday, the U.S. Senate voted to return to the House of Representatives to refine the budget law , deprived of funding health care reform, a key to the political agenda of President Barack Obama.

Stoxx Europe 600 Index fell 0.7 percent to 309.87 . Since early September, the index rose by 4.2 percent.

We also add that the Prime Minister Enrico Letta is going to demand a vote of no confidence in his government on October 2 , he said on Sunday night , the TV channel Rai 3, after meeting with President Giorgio Napolitano . The Prime Minister has requested an emergency meeting with Italian President after five Ministers of the Council of Ministers belonging to the party of Silvio Berlusconi's "People of Freedom" , was on Saturday decided to withdraw from the government , which , according to them, they can no longer perform campaign promises .

Shares of UniCredit - Italy 's biggest bank , fell 2.4 percent to 4.66 euros.

The cost of Syngenta AG (Synn) fell 2.6 percent to 365.10 Swiss francs after Citigroup Inc lowered its corporate recommendation on the shares to ' neutral ' from ' buy '.

Telecom Italia SpA shares rose 3 percent to 59.75 cents on the euro amid speculation that CEO Franco Bernabe resigns.

At the moment :

FTSE 100 6,456.79 -55.87 -0.86 %

CAC 40 4,137.71 -49.06 -1.17 %

DAX 8,580.53 -80.98 -0.93%

Asian stocks fell, with the benchmark index paring its biggest monthly gain since 2012, on concern the U.S. government is headed for a shutdown amid a budget stalemate.

Nikkei 225 14,455.8 -304.27 -2.06%

Hang Seng 22,859.86 -347.18 -1.50%

S&P/ASX 200 5,218.88 -88.18 -1.66%

Shanghai Composite 2,174.66 +14.64 +0.68%

Toyota Motor Corp., which gets 31 percent of its revenue in North America, declined 2.6 percent.

Mizuho Financial Group Inc., Japan’s third-largest bank, sank 4.1 percent after its lending unit was penalized by Japan’s banking regulator for failing to end transactions with “anti-social” groups.

BHP Billiton Ltd., Australia’s biggest oil producer, dropped 1.7 percent as crude fell.