European shares edge lower, Spanish debt worries linger

European shares headed towards their lowest levels this year on Wednesday with investors nervous about the euro zone's debt problems after a sell off in Spanish bonds and signs of dwindling global growth.

Spanish 10-year bonds eased back to yield 5.92 percent after coming close to six percent on Tuesday as investors appeared to be losing confidence in the government's ability to exercise the fiscal discipline needed to control its public finances.
"Euro area sovereign tensions remain centered on Spain while doubts over the outlook for the U.S. economy continue to niggle," analysts at Societe Generale said in a note.
German 10-year yields were up 3 basis points in early trade to 1.67 percent, not far from the record low of 1.637 percent.
With German yields at rock-bottom levels, a 5 billion euro sale of a new 10-year bonds later in the session will be closely watched for any sign that a low return on investment is deterring buyers.
The euro meanwhile remains resilient to the selloff in sovereign debt of peripheral countries and inched up 0.3 percent to $1.3120, while the dollar rebounded from a five-week low of 80.60 yen to trade around 80.78.
The FTSEurofirst 300 index .FTEU3 was down 0.15 percent, at 1,024.81, having slid 2.5 percent on Tuesday to its lowest close since mid-January.