Italy raised 4.9 billion euros (USD 6.5 billion) in a bond issue on Thursday, just short of a 5.0 billion-euro maximum target that the Treasury had been hoping to achieve.
The rate on three-year bonds rose to almost four percent, up over one percent compared with last month, one day after Italy’s one-year borrowing costs also doubled in an auction on Wednesday.
Italy’s poor bond sale along with recent days’ rises in Spanish yields sent most shares tumbling at European markets on Thursday.
London’s benchmark FTSE 100 index fell 0.13 percent to 5,627.55 points in midday deals, while the Paris CAC 40 dropped 0.24 percent to 3,229.84 points.
Milan slid 0.79 percent and Madrid sank 1.36 percent, whereas Frankfurt’s DAX 30 rose 0.46 percent to 6,705.59.
Both Italy and Spain are struggling to reduce their deficits and debts while trying to increase their sluggish growth.
Investors fear that the European economies will need bailouts from their eurozone peers to cap their borrowing costs.
MRS/JR