ECB buying Italian, Spanish government bonds - traders

LONDON, Nov 25, (REUTERS) - The European Central Bank was buying Italian government bonds in the secondary market ahead of Friday's 6-month T-bill and zero coupon bond sale, traders said.

However, their action did little to contain the slide in Italy's bonds with two-year yields last up 26 basis points at 7.89 percent, a new euro-era high.

Italy paid 6.504 percent to sell the 6-month paper, compared with 6.087 percent at a sale of 12-month paper last week. The two-year zero coupon bond was sold with a yield of 7.814 percent .

"The results look weak given how much of a concession had been built up," said one trader.

The ECB was buying three-year Spanish bonds, five-year Italian bonds and some Irish paper, one trader said.