European shares were called to open lower on Thursday as weaker U.S. economic data and concern ahead of an Italian debt auction showed how little impact a bailout of the Spanish banking system at the weekend had had on the euro zone debt crisis.
The FTSE was seen opening 8 points lower at 6135, the DAX was expected to open lower by 24 points at 5460 and the CAC 40 was seen lower by 8 points at 3022.
Late on Wednesday Moody’s Investors Services downgraded Spain’s sovereign debt by three notches from A 3 to Baa3 - just above junk status. The rating agency also placed the country on review for a possible further downgrade.
The action, which followed a similar move by Fitch last week, came despite the 100 billion euro bailout package agreed on Saturday, with Moody’s actually citing those plans as a source of concern, alongside Spain’s limited access to financial markets and continued weakness in the country’s economy.
Moody’s also cut its credit rating for Cypriot sovereign debt by two notches to Ba3 from Ba1 citing rising risks of a Greek exit from the euro zone and an already strained economic position.
Meanwhile, Italy's borrowing costs were expected to rise sharply at a bond auction on Thursday as investors, unconvinced by the bailout deal for Spain, turned their attention to the euro zone's third-largest economy.Page 1 of 4 | Next Page