World shares fell sharply and the euro fell to a two-week low on Wednesday as growing opposition to measures aimed at resolving the euro zone's debt crisis unnerved investors already skittish about the weak outlook for global growth.
Investors focused on Spain, where the main share index fell 3.2 percent .IBEX and yields on 10-year bonds hit 6 percent, as doubts grew about Madrid's commitment to reform due to violent protests and talk of secession by the wealthy Catalonia region.
A general strike in Greece and signs of discord among top euro zone officials over new policies to tackle the crisis added to investor concerns, taking the gloss off recent moves by the European Central Bank to calm the markets by buying bonds.
International lenders are at loggerheads over how to solve the crisis in Greece, threatening more trouble for the euro as the International Monetary Fund demands European governments write off some of the Greek debt they hold.
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The euro fell to $1.2836, a two-week low, before edging back to $1.2850, down almost 0.4 percent on the day. Stocks on Wall Street opened lower, following European stock prices lower, and crude oil prices fell more than 1 percent.
"The more jittery the market gets about when Spain will seek aid the higher yields will go ... The key will be whether Spain asks for a bailout before their yields surge," said Paul Robson, currency analyst at RBS.
Yields on Spain's 10-year bond topped 6 percent for the first time in a week.
Traders and investors active in the market have realized that despite a reduction in risks, the ECB's bond-buying program does not resolve all the problems in the euro zone, said Philip Shaw, an economist at Investec.
MSCI's all-country world equity index .was down 1.1 percent at 331.18 points. The FTSEurofirst 300 of top regional shares fell 1.7 percent, but Wall Street didn't fall as hard.
The Dow Jones industrial average was down 3.91 points, or 0.03 percent, at 13,453.64. The Standard & Poor's 500 Index was down 4.00 points, or 0.28 percent, at 1,437.59. The Nasdaq Composite Index .was down 13.13 points, or 0.42 percent, at 3,104.59.
U.S. government debt prices rose for an eighth straight session as worries that Spain's reluctance to ask for a full-blown bailout would prolong Europe's debt crisis, supported a bid for safe-haven debt.
The benchmark 10-year U.S. Treasury note was up 10/32 in price to yield 1.6352 percent.
Brent crude oil, the global benchmark, fell more than 1 percent to below $109 a barrel.
Brent futures fell 1.1 percent to $109.25 a barrel. U.S. light sweet crude oil fell 1.5 percent to $89.97 a barrel.
(Reporting by Herbert Lash)
