Diacritics
The acute accent may be used on ⟨e⟩ and ⟨o⟩ to represent close-mid vowels when they are stressed in a position other than the default second-to-last syllable; this use of accents is generally mandatory only in the final syllable. Since final ⟨o⟩ is hardly ever close-mid, ⟨ó⟩ is very rarely encountered in written Italian (metró). The grave accent may be used on ⟨e⟩ and ⟨o⟩ when they represent open-mid vowels. The accents may also be used to differentiate minimal pairs within Italian, for example pèsca "peach" and pésca "fishing", but in practice use of this possibility is limited to didactic texts. In the case of final ⟨i⟩ and ⟨u⟩, both possibilities are encountered. The by far most common option is the grave accent, though this may be due to the rarity of the acute accent to represent stress; the alternative of employing the acute is in practice limited to erudite texts, but can be justified as both vowels are high (as in Catalan); however, since there are no corresponding low (or lax) vowels to contrast with in Italian, both choices are equally acceptable.
The circumflex accent can be used to mark the contraction of two vowels, especially two i's. For example, it can be used to differentiate words like geni ('genes') and genî ('geniuses').
Read more about this topic: Italian Alphabet