Fears that Spain is on the verge of asking for a multibillion-euro bailout from the EU have hit the London market, google.com/hostednews/ukpress reports. The FTSE 100 Index was 95 points lower at 5555 in early trading amid speculation that a raft of Spanish regions were poised to ask for government bailout funds, increasing the likelihood that the country itself will turn to the EU for help. The yield on 10-year Spanish bonds rose to a euro-era high of 7.5% in a sign that investor confidence in the country’s ability to control its finances is increasingly waning. Craig Erlam, market analyst at Alpari, said: “The eurozone’s fourth largest economy now looks a cert to request a full bailout with even short-term yields now reaching unsustainable levels.” “This is surprising, especially considering the recent package of savings measures … and the definitive validation of the bank bailout,” wrote Daniel Pingarron, a strategist at IG Markets trading group. “A large number of investors think that the possibility of a break-up of the euro is rising.”, according to chinapost.com.tw.On Friday, Valencia’s regional government said it would tap the recently-created emergency-loan fund to help cope with its heavy debt. The regional administration said: “Like other regions, Valencia is suffering the consequences of liquidity restrictions in markets as a result of the economic crisis.”, moneymarketing.co.uk informs.Fears have risen that other regions will seek support from the fund -with attention settling on Catalonia and Murcia. This would add to the financial pressure on the central government and increase the chances of it having to seek a full-scale bailout. The Bank of Spain added to the nation’s worries this morning by estimating that its recession deepened over the last quarter, from a 0.3 per cent contraction in the first quarter to 0.4 per cent in the second. This means the economy would be 1 per cent smaller than it was a year earlier.Meanwhile, the generic yield on 10-year gilts fell stood at 1.436 per cent at 0957 BST, as the UK’s safe haven status attracted investors following the fresh problems of the eurozone. Markets across Europe have dropped on this morning’s fears, while the euro has fallen to an 11-year low against the yen. Last week, eurozone finance ministers unanimously agreed to offer up to EUR 100 bln in assistance to Spain so it can recapitalise its debt-laden banks. The full size of the package will not be confirmed until an audit of the country’s banks has been completed.Financial stocks came under pressure with Aviva falling nearly 4 per cent or 10.9p to 283.8p, Royal Bank of Scotland dropping 7.2p to 197.5p and Barclays dropping 4.5p to 155.2p. A forecast from a Chinese central bank adviser that China’s economy could wane further in the third quarter also deepened concerns about global growth and hit resource stocks. Polymetal International fell 30p to 796p, Anglo American dropped 70.5p to 1958p and Evraz shed 8p to 226.4p.