Portugal yields rise on worries over Banco Espirito Santo probe

LONDON: Portuguese government bond yields rose on Monday after Luxembourg's justice authorities said they had begun an investigation into three holding companies of Portugal's largest listed bank.

Shares of Banco Espirito Santo plunged on Monday. Finance Minister Maria Luis Albuquerque said the bank was well-capitalised and the government saw no threat to financial stability and public accounts.

"Some could be selling as a hedge because they cannot sell the bank's bonds if the market is too illiquid," one trader said.

Portuguese 10-year bond yields rose 9 basis points to 3.68 percent.