PARIS: The yield on 10-year Spanish bonds rose sharply on Friday after a brutal downgrade on Spain by Fitch ratings agency and amid speculation that a bailout for Madrid was imminent.
At around 0930 GMT the rate of return for investors on 10-year Spanish bonds on the secondary bond market rose to 6.177 percent from 6.061 percent at the close of trading on Thursday.
The Spanish yield had eased in recent days, even dipping below the closely-watched level of six percent.
Fitch slashed Spain's credit rating by three notches on Thursday, from "A" to "BBB" just above junk status and warned it would likely stay in recession this year and next.
The cut moved Madrid a step closer to needing an international bailout, following the path of Greece, Ireland and Portugal, as it grapples with a fiscal crisis undermined by a struggling banking sector.
Italy, the other heavyweight eurozone member under immense stress, saw its benchmark yields climb to 5.782 percent from 5.695 percent on Thursday.
Countries considered to give safety from the turbulence meanwhile saw yields fall with Germany's rate down to 1.299 percent, from 1.373 percent on Thursday and France's yield at 2.510 percent from 2.559 percent.
The eurozone bond market is under constant heavy pressure stemming from concern about public finances and the troubled banking system in Spain.
For a major eurozone country such as Spain, an interest rate above 6.0 percent is considered dangerous territory with respect to its ability to refinance public debt.
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