"Italy is currently experiencing an externally driven deterioration in its perceived creditworthiness"
- Nicholas Spiro, managing director at Spiro Sovereign Strategy
Italy placed 5.73 billion euros of 10-year and 5-year debt in an auction on Wednesday, falling short of its 6.25 billion euros target, national department of the treasury data showed. Borrowing costs rose above six per cent from the first time since January.
"Italy is currently experiencing an externally driven deterioration in its perceived creditworthiness," said Nicholas Spiro, managing director at Spiro Sovereign Strategy in London, in a note to clients.
"We may just be approaching the endgame where either the eurozone takes action to stem the bleeding or the whole thing collapses," said Gary Jenkins of Swordfish Research.
European stocks fell on Tuesday. The Stoxx Europe 600 Index retreated 1.53 per cent to 240.56. Germany's DAX Index lost 1.81 per cent and France's CAC 40 Index tumbled 2.24 per cent. The U.K.'s FTSE 100 Index erased 1.74 per cent to 5,297.28.
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