France sells bonds at negative rate

France's government has sold short-term bonds at negative interest rates for the first time, a sign of investor confidence despite concerns about French debts and the wider eurozone.

Despite the dropping rates, France's economic outlook is stagnant. President Francois Hollande said today that growth in the first half of this year is expected to be "nil".

Yields, or borrowing rates, have been falling on French medium and long-term bonds in auctions over the past couple of months as investors flock to the perceived safety of Europe's larger economies.

In a sale on Monday, the treasury sold three-month bonds at -0.005%, and six-month bonds at -0.006%.

The treasury agency said it is the first time they have registered negative yields.

AP