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Ten-year bonds dropped from recent record highs but remained near the seven per cent limit deemed unsuitable by investors, Reuters reports.
Other eurozone countries have been forced to seek bailouts after rising above the seven per cent threshold.
In a day of thin trading, the FTSE 300 index rose 0.04 per cent to 983.89 points after reaching a nadir of 981.22, while only trading at 10.3 per cent of its 90-day average.
Manoj Ladwa, senior trader at ETX Capital, told the news provider the market was likely to remain "unpredictable and choppy."
"Italy may have got the auction away, but it is still at a high rate. It is a period of paying off high debt payments and ultimate limited growth," he added.
Investor sentiment was initially assuaged following the successful short-term debt auction yesterday, Reuters noted.
Posted by Greg Secker
