Italy pays higher rates on 10-year bonds

The Italian treasury was forced to pay increased rates to raise 942 million euros ($1,362 million) with 10-year bonds , the Bank of Italy said on Wednesday. The relatively high rates are a sign of continuing anxiety among investors. The bonds were sold with a yield of 4.07 percent compared to 2.51 percent for the last similar operation on May 27, but demand rose to 1.593 billion euros. Bond rates had already risen on Tuesday for a nine-billion-euro short-dated bond issue and investors will be closely watching a sale of medium and long-term bonds on Thursday. On the Milan stock exchange, a fall in bank shares weighed down the benchmark FTSE Mib index. UBI Banca was down 5.22 percent late morning, while Intesa Sanpaolo had dropped 4.71 percent and Unicredit 4.14 percent. After a brief respite at the end of last week, the market is once more riddled with uncertainty and fears that Italy may face contagion from the ongoing debt crisis.