Investors showed deep concern ahead of a Spanish government bond auction due Thursday, fearing Madrid could be thrown back into the centre of the eurozone debt crisis. Markets have punished Spain sharply since an April 4 government bond auction drew only feeble interest, with the state barely raising the minimum amount targetted. That weak sale, coming shortly after the government unveiled an austerity budget with spending cuts and tax increases of 27 billion euros ($35 billion), reawakened doubts over the sustainability of Spain\'s financing. A similar result Thursday, when the Treasury aims to raise 1.5-2.5 billion euros, could compound concerns that Spain might end up needing the kind of a debt bailout already afforded to fellow eurozone strugglers Greece, Ireland and neighbouring Portugal. \"Investors remain nervous ahead of tomorrow\'s 10-year Spanish bond auction,\" said equities analyst David Morrison at trading group GFT in London. \"If yields jump back over 6.0 percent, then the European debt crisis will return centre stage, with Spain the leading lady.\" The Madrid share market\'s IBEX 35 index of leading shares tumbled 294.10 points or 3.99 percent, to close at 7,079.20 Wednesday -- the lowest finish since March 2009. The market has lost more than 13 percent of its value so far this year and more than 28 percent over the past 12 months. \"Given the increasing unemployment rate and massive cuts in the budget last month, the trend is likely to continue until it reaches March 2009 lows of 6,700 points,\" said Craig Erlam, analyst at trading group Alpari in London. The Spanish debt fears infected other markets Wednesday. At the close, London lost 0.38 percent, Frankfurt 1.01 percent and Paris 1.59 percent while Milan dropped 1.71 percent after the government downgraded its growth forecasts, putting off the 2013 target for a balanced budget. Some analysts say Spain will struggle to cut the public deficit to levels it has agreed with the European Union during a period of recession and with unemployment at nearly 23 percent. Spain posted a public deficit of 8.51 percent of gross domestic product in 2011, missing its 6.0-percent target by a wide margin. Prime Minister Mariano Rajoy\'s conservative government has promised to cut the deficit -- the shortfall of revenue to spending -- to 5.3 percent of GDP in 2012 and 3.0 percent of GDP in 2013. Some in the markets have shown concern, however, that the focus on austerity could drive the battered economy deeper into recession, making a debt rescue more likely. Investor sentiment was further undermined by official figures Wednesday showing that the bad loan burden at Spanish banks shot to an 18-year high in February. Spanish banks are a key concern because of the declining value of the huge loans they allowed to build up during a property bubble that collapsed in 2008. Doubtful loans in February amounted to 143.8 billion euros, rising to 8.15 percent of total credits -- the highest ratio since 1994 -- from 7.91 percent in January, the Bank of Spain said. Spain only emerged at the start of 2010 from nearly two years of recession sparked by the global financial crisis and a property bubble implosion that destroyed millions of jobs and left huge debts in its wake.