German bond yields drop, Italy suffers, as markets reel from Wall Street beating

German government bond yields dropped sharply and Italian debt rose on Thursday as the effects of a brutal selloff on Wall Street spread across the world.

U.S. stocks tumbled on Wednesday, with the S&P 500 and the Dow marking their biggest daily declines since Feb. 8, and technology stocks were at the centre of the carnage.

Germany's 10-year government bond yield dropped six basis points to 0.49 percent, a one-week low, while Italian 10-year yields shot up five bps to 3.55 percent, pushing the spread between the two out to 306 bps.

This after U.S. Treasury yields dropped about eight basis points to 3.15 percent, coming off a seven-year high on rate hike expectations.

German bund futures opened 45 ticks higher at 158.33.