Wires

European shares fall further after Italy yields rise

LONDON, Oct 10 (Reuters) - European shares extended earlierlosses on Wednesday, after a rise in the one-year bond yields ofItaly highlighted persistent worries over the euro zone'ssovereign debt crisis.

The FTSEurofirst 300 index was down 0.4 percent at1,091.37 points by 0935 GMT, while the euro zone Euro STOXX 50index fell by 0.6 percent.

Italy's one-year borrowing costs edged up at an auction onWednesday, with persistent uncertainty over a possible bailoutrequest from Spain reducing investor appetite for short-datedperipheral debt.

"Yields went up at the Italian auction, and everyone hastheir eyes on these. It's an indication that risk aversion is onthe rise again in Europe," said David Thebault, head ofquantitative sales trading, at Global Equities.

(Reporting by Sudip Kar-Gupta and Blaise Robinson; Editing byToni Vorobyova)

((sudip.kargupta@thomsonreuters.com)(+44 207 542 9795 /+44 207542 7717)(Reuters Messaging:sudip.kargupta.thomsonreuters.com@reuters.net))

Keywords: MARKETS EUROPE STOCKS/