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European shares were called to open lower on Friday, snapping a four-day rally, after Fitch ratings agency downgraded Spain’s sovereign debt by three notches to triple B, just above junk status, and the International Monetary Fund (IMF) was set to warn Spain’s banking system would need a bailout package worth 40 billion euros ($50 billion).
The FTSE was called to open 28 points lower at 5420, the DAX was seen opening 37 points lower at 6107 and the CAC 40 was expected to open 32 points lower at 3039. Meanwhile, Spain’s IBEX was expected to open 42 points lower at 6396.
Fitch signaled it could lower Spain’s credit rating still further by putting the country on negative outlook. The new rating was Spain's lowest among the three main ratings agencies. Fitch said in a statement that Spain was especially vulnerable to a worsening of the euro zone crisis due to a high level of net foreign indebtedness.
The ratings decision was a blow for the Spanish government which had earlier on Thursday seen strong demand for its sovereign debt on the capital markets despite Treasury Minister Cristobal Montoro warning on Monday that he feared Spain was on the verge of losing access to the markets.
Spain sold 2.1 billion euros worth of bonds , lthough yields were higher than in previous tenders.
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