Wednesday 25 April 2018

EU shares fall on debt, volcanic ash fears

Frankfurt, May 23, 2011

European shares fell on Monday on renewed worries about the euro zone's debt crisis, gloomy macroeconomic data and the emergence of a new Icelandic volcanic ash cloud which threatens to disrupt European air traffic.

Fitch cut Greece's debt ratings by three notches to B-plus late on Friday - further into 'junk' territory, and the threat of contagion was reflected by Standard & Poor's move to cut the outlook for Italy to negative on Saturday.

'It seems like we are facing the beginning of the week with quite some clouds in the sky,' analysts at Close Brothers Seydler Bank said in a note.

'The earning season is mostly over and investors are missing a positive driver. Concerns about the financial stability are still a burden on the stock markets too.'

At 1006 GMT the FTSEurofirst 300 index of top European shares was down 1.5 percent at 1,119.60 points, hitting its lowest in more than a month, and dipping below the 50-day moving average.

Italy's main share market index dropped 2.8 per cent, while the Thomson Reuters Peripheral Eurozone index was down 3.3 per cent.

'It's more than Greece now. This is more a reflection of the inability of the EU to sort out anything, and that makes people worry beyond Greece,' said Lothar Mentel, chief investment officer at Octopus Investments, which manages $4 billion.

France's Credit Agricole, one of the most exposed banks to Greece's debt-stricken economy, fell 2.7 per cent.

The heavyweight Stoxx Europe 600 banking sector index was down 1.5 per cent, also weighed on by Commerzbank's announcement of a larger than expected discount on a sale of new shares.

The airline sector also came under pressure as an eruption by Iceland's most active volcano was set to keep the island's main airport shut on Monday and raised concerns over a possible disruption for air travel in the region.

Air France, EasyJet, Ryanair and Lufthansa were all down between 3 and 5.4 per cent.-Reuters

Tags: Iceland | airports | Debt crisis | EU shares | Volcanic ash |


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