Spain easily raised 3 billion euros ($3.9 billion) on Thursday in a debt auction that was a key test of investor confidence, the day after a successful bond sale in Portugal eased market pressures somewhat.

Demand was strong, with bids worth 2.1 times the amount on offer. However, the average yield on the 5-year bonds was up to 4.54 percent compared with 3.58 percent at the last such auction on Nov. 4. Then, the sale was only 1.6 times oversubscribed.

Spain had hoped to raise between 2 billion euros and 3 billion euros on Thursday.

The sale came a day after Portugal, which many fear might be the next in line to need a bailout after Greece and Ireland, saw good demand for its debt auction.

Spain's main stock index closed 5 percent higher Wednesday evening and was up another 2 percent on Thursday shortly after the bond auction figures came out.

The government insists neither Portugal nor itself need a bailout, thanks to austerity measures and reforms designed to shore up their ailing public finances.

The Spanish government says the country is not like Greece or Ireland, noting its overall debt level as a percentage of GDP is 20 percentage points below the EU average.

Still, investors fear that contagion from the European debt crisis will push Spain's borrowing costs up. A bailout of Madrid could be devastating for the eurozone because Spain is about five times larger than either Greece or Ireland and would test the bloc's financial strength.

The auction eased pressures in Spain's debt markets — the yield on 10-year bonds fell to 5.36 percent after the result from 5.46 percent the day before. That made for a spread, or difference, of around 2.4 percentage points with the benchmark German equivalent.

The yield on Portuguese bonds on the secondary market also fell Thursday for the fourth straight day, to 6.66 percent. Portugal's government debt agency announced it will sell 750 million euros in 12-month Treasury bills next Wednesday.