World stocks fell on Friday, extending an overnight slide, with renewed pressure on Spanish bonds reflecting fears the euro zone's debt crisis was spiraling out of control.

Worries over the crisis also prompted investors to shed riskier commodities, after prices took their steepest tumble since September on Thursday.

Spain's borrowing costs at a sale of 10-year debt soared to their highest in the euro's history on Thursday, pulling it back into the vortex of a crisis that is increasingly threatening Europe's second biggest economy France.

The new 10-year Spanish bond was yielding 6.85 percent, with traders expecting more upward pressure before the country's elections on Sunday.

Many consider these (Spanish bond yield) levels unsustainable after the demise of the likes of Greece and Portugal when their yields hit similar levels, said Stan Shamu, strategist at IG Markets.

Spain will be heading to the polls this weekend after a shocker of a week in the bond market. Recent leadership changes in Italy and Greece have failed to drive the market to a sustainable recovery, suggesting it will take much more than a leadership change to appease investors.

The MSCI world equity index <.MIWD00000PUS> was down 0.6 percent near its lowest levels since October 20 and falling for a fourth consecutive day.

European stocks <.FTEU3> fell across the board, with pan-Eruopean FTSEurofirst 300 index <.FTEU3> shedding 0.7 percent.

New Italian Prime Minister Mario Monti on Thursday pledged his country would embark on radical fiscal reforms to pull itself out of the debt crisis and Italian bonds were roughly steady in early trade.

But investors remained on edge as euro zone governments struggle to raise funds and given signs that banks are refraining from lending, seizing up market liquidity.

Euro/dollar three-month cross-currency basis swaps, the cost of swapping euros for dollars, widened to -136 basis points on Thursday, the most since the 2008 financial crisis.

The euro climbed against the dollar as investors unwound bearish bets on the single currency to book profits ahead of the weekend, but dealers said appetite to sell on such small rebounds was high.

With so much up in the air there's nothing else to focus on apart from the immediate, which is that the euro zone looks to be heading into the precipice, Jane Foley, senior currency strategist at Rabobank. Ahead of the weekend I don't think anyone is ready to counter that view.

(Additional reporting by Brian Gorman and William James)