European shares fall further after Italy yields rise

LONDON, Oct 10 (Reuters) - European shares extended earlier losses on Wednesday, after a rise in the one-year bond yields of Italy highlighted persistent worries over the euro zone's sovereign debt crisis.

The FTSEurofirst 300 index was down 0.4 percent at 1,091.37 points by 0935 GMT, while the euro zone Euro STOXX 50 index fell by 0.6 percent.

Italy's one-year borrowing costs edged up at an auction on Wednesday, with persistent uncertainty over a possible bailout request from Spain reducing investor appetite for short-dated peripheral debt.

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

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

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