Spain's bond rate up on uncertainty in Italy

Rate for Spain's benchmark 10-year bond rises on uncertainty after Italy's PM resignation plan

Associated Press

MADRID (AP) -- Italian Premier Mario Monti's announcement that he plans to resign has sent the interest rate for Spain's benchmark 10-year bond climbing again.

The rate, an indication of investor appetite, rose 0.19 percentage points to 5.84 percent in opening trading Monday. It later edged back to 5.59 percent. The yield had dropped to 5.3 percent last week.

The main IBEX stock index in Madrid was down 2 percent.

Spain and Italy are two countries at the center of the European debt crisis.

Recession-hit Spain's borrowing costs rose to unsustainable highs of 7 percent earlier this year but have eased greatly since the European Central Bank pledged in September to buy up a country's short-term bonds if it formally applies for aid.

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