Yields soar on Spanish bonds
Spain was forced to offer sharply higher returns on Tuesday to sell 4.45 billion euros ($6.32 billion) in government bonds as investors worried over sovereign debt burdens in the eurozone.
On the 12-month bonds, the average rate or yield soared to 3.702 percent from 2.695 percent at the last such auction on June 14.
For 18-month bonds, the yield was up to 3.912 percent from 3.26 percent.
Both rates were well above market levels, with 12-bonds month closing Monday at 2.100 percent and 18-month bills at 2.350 percent.
However demand was strong at 11.8 billion euros, which allowed the Treasury to obtain its objective of selling between 3.5 and 4.5 billion euros.
Spain, with an economy the size of the Greek, Irish and Portuguese economies combined, has been battling to convince markets that it should not be lumped together with the three lame ducks now under EU and IMF rescue programmes.
But it continues to suffer fears of contagion from the euro zone debt crisis.
The Madrid stock market closed down 1.44 percent on Monday with banking stocks particularly hard hit. Mid-morning on Tuesday the market was up 1.98 percent, apparently as investors sought to recover losses.
© 2011 AFP