Date: Thursday 14 Jun 2012
-Italian yields rise at auction, but bonds steady, Spanish yields at 7%
-Credit Suisse down 10%
-OPEC meeting on tap
-Credit Agricole could walk away from Greek subsidiary
-Nokia to lay-off 10,000 employees
Stoxx 600: -1.0%
FTSE Mibtel: -0.51%
Ibex 35: 0.03%
The main European equity benchmarks are now registering moderate falls. Rating agency Moody´s decision last night to axe Spain´s credit rating by three notches seems to have heightened the nervousness in the markets, sending yields on the country’s 10 year bonds sharply higher, towards 7%.
Yet perhaps the worst news is that Fitch may soon cut Spain again depending on the actions which are undertaken by the country in the next few months. “Simply put, further Spain downgrades could easily bring matters to a head in the Eurozone, forcing authorities to act or capitulate,” comment analysts at Digital Look.
Further contributing to that poor sentiment, if not actually the main cause of it, are the poor economic indicators released in that Iberian country this morning.
Acting as a backdrop, Chancellor Angela Merkel is speaking in Berlin on what her objectives are for this next weekend´s meeting of G20 countries. Of interest, she seems to be trying to ‘turn the tables’ on some of her critics in the developing world who, for quite a few observers, tend towards protectionist policies by more-or-less overt means.
This morning’s auction of Italian debt seems to have been a relative success, with the country managing to find a home for its target issuance of €4.5bn in medium and long-term debt. Yields on Italian and German debt are now stable.
From a sector stand-point the worst performance is to be seen in the following industrial groups within the DJ Stoxx 600: basic resources (-2.01%), automobiles (-1.8%) and technology (-1.33%).
Nokia is plummeting by 10% after warning on its outlook for the second quarter, as is Credit Suisse after Swiss regulators told the lender it must increase its capital position.
BMW and Daimler are taking a knock from negative research out on both manufacturers today from Morgan Stanley.
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