European stocks and the euro fell Thursday,giving up earlier gains,after a credit agency cut Portugals sovereign debt to junk, or below investment grade.
The decision by Fitch Ratings to cut Portugals sovereign debt rating one notch,to BB-plus from BBB-minus,served as a reminder of the dangers hanging over the euro zone.
Fitch cited its forecast for Portugals economy to contract by 3 per cent next year,saying the recession makes the governments deficit-reduction plan much more challenging and will negatively impact bank asset quality. Moodys Investors Service cut the bonds to junk in July,while Standard & Poors rates them just above that level.
- Twitter War Between Congress Leader Amarinder Singh & Delhi CM Arvind Kejriwal
- Life Of Actor-Dancer Ashwini Ekbote Who Died During A Performance
- Idea Exchange With Gurmeet Ram Rahim Singh
- PM Narendra Modi Bats For Equal Rights : Here What He Said On Triple Talaq
- Uncle Shivpal Targets Akhilesh, Claims CM Told Him He Will Form Another Party
- Pakistan Continues To Violate Ceasefire In RS Pura
- Samajwadi Party’s internal fight divides SP
- Cyrus Mistry Removed As Chairman of Tata Sons: Here’s What Happened
- Wreath Laying Ceremony Of Slain Soldier Sushil Kumar Observed
- Virat Kohli Powers India Home With Unbeaten 154
- Pakistan Resorts To Heavy Mortar Shelling, 1 BSF Jawan Dead, 3 Injured
- Bigg Boss 10 Weekend Ka Vaar: Priyanka Jagga Evicted
- Here’s How Much Army Welfare Fund Has After MNS Demanded Rs 5 Cr To Cast Pak Artistes
- Shiv Sena Chief Uddhav Thackeray Take A Jibe At MNS: Here’s What He Said
- Samajwadi Party Crisis Deepens: Here’s How It Will Impact UP Polls
Earlier,European equities and the euro had risen after a private research institutes economic report showed business sentiment improving in Germany,the largest economy on the Continent.
The Ifo institute said its main business climate index for Germany improved in November to 106.6 from 106.4 in October,the first uptick in four months,and a sign that the German economy is still performing relatively well despite the international turmoil.
With markets in New York closed for the Thanksgiving holiday,trading volume was subdued,particularly in contrast from a day earlier. On Wednesday,global equity markets and bonds were upended by the failure of the German government to sell a large portion of the debt it was auctioning,sparking fears that investors might have lost faith in all euro-zone sovereign assets.
In afternoon trading,the Euro Stoxx 50 index,a barometer of euro zone blue chips,fell 0.3 per cent,while the FTSE 100 index in London fell 0.2 per cent.
German 10-year bonds,which became the focus of attention on Wednesday,continued to fall in price. The yield,which moves in the opposite direction,rose 5 basis points to 2.19 per cent. Portuguese 10-years fell more heavily,trading to yield 11.42 per cent,up 84 basis points. A basis point is one-hundredth of a per cent.
Standard & Poors 500 index futures fell 0.1 percent. The S&P 500 fell 2.2 percent on Wednesday.
The euro fell to $1.3336 from $1.3341 late Wednesday in New York,while the British pound fell to $1.5501 from $1.5555. The dollar fell to 0.9192 Swiss francs from 0.9201 francs. But the US currency gained against its Japanese counterpart,rising to ¥77.10 from ¥77.31. DAVID JOLLY
France,Germany to let ECB fight inflation
France and Germany agreed to stop arguing over whether the ECB should do more to rescue the euro zone from a deepening sovereign debt crisis. French President Nicolas Sarkozy and German Chancellor Angela Merkel said after talks with Italian Prime Minister Mario Monti that they trusted the central bank and would not touch its mandate.