European shares turned negative in late morning trading, after today's Italian bond auction led to the country's highest cost of borrowing for the first time since the launch of the euro more than a decade ago.
By mid morning, the Italian benchmark was down 2%, according to Reuters, and by noon, the FTSE 100 was down 14.44 points, or 0.26% to 5699.68 points. Germany's DAX fell 0.08% to 6332.58, while France's CAC fell 0.43% to 3354.19.
During Italy's first fundraising since the bailout plan was announced, the country paid 6.06% to sell its March 2022 bond, versus an avearge rate of 5.86% at an auction a month ago, which also hit a euro lifetime high.
Prices on the Italian bond market stayed a fraction below the auction prices, with yields hovering at 5.971% in mid-day trading, up from yesterday's close of 5.882.
According to Reuters the gap between German and Italian 10 year bonds widened by ten basis points to 378 basis points. By noon, German pond yields were also up, from 2.618 to 2.658.
The swing cleared a number of banks out of the top ten blue chip risers, with Lloyds finding itself amongst the top ten fallers, down 3% to 35p, while Royal Bank of Scotland followed the same trajectory, down 3.23% to 26p.
