Global stock markets were under pressure yesterday as the eurozone debt crisis continued to push most European government borrowing costs dangerously higher.

Dealers said there was some respite as Italy and Greece put in place new governments committed to tough economic reforms but all eurozone nations bar powerhouse Germany were roughed up on the bond markets.

Italian benchmark 10-year bond yields once again topped the 7.0 per cent red-zone level, with Spain hit too after it had to abandon its 2011 growth target of a very modest 1.3 per cent.

Only Germany stood out as a beacon of safety, attracting investors anxious not to get caught up in the eurozone debt storm as US figures showed sharp inflows of funds seeking a refuge there.

In London, the FTSE-100 index of top companies closed down 0.15 per cent to 5,509.02 points. In Paris, the CAC-40 gained 0.52 per cent to 3,064.90 points but in Frankfurt the DAX 30 was down 0.33 per cent at 5,913.36 points. The prospects spooked the stock markets and even New York could find no support in better-than-expected data on US industrial output, confirming a recent trend of more positive economic figures.

“Contagion has spread across eurozone bond markets like wildfire and the lack of action to create a firewall means that there is little to extinguish it,” Credit Agricole said in a note to clients.