Spanish bond yield hits 5-week high on post-election uncertainty
Yield difference between Spanish and Italian bonds at its widest in a month
London
SPAIN'S government bonds fell, pushing the 10-year yield to the highest in five weeks, after an indecisive election left Prime Minister Mariano Rajoy with limited options to forge a governing majority, threatening a period of instability.
The yield difference between Spanish and similar-maturity Italian bonds widened to the most since mid-November amid muted declines in the rest of the euro area's peripheral debt markets.
While Mr Rajoy's People's Party (PP) placed first in Sunday's election, earning the right to try to form government, the results suggest the only party able to form a majority with him in the 350-member Parliament would be the socialists, the PP's historic rivals.
Even in Spain the losses were limited, with the slide only the largest in a week, as investors focus on European Central Bank (ECB) bond purchases, lower debt issuance and an improving economic outlook. Monday is the last day of ECB buying until …
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