Bloomberg News

European Stock Futures Decline on S&P Downgrades of Global Banks

November 30, 2011

Nov. 30 (Bloomberg) -- European stock-index futures dropped, tracking losses in Asian shares, after Standard & Poor’s cut the credit ratings of some of the world’s largest banks. U.S. index futures also fell.

UBS AG, Switzerland’s biggest bank, Barclays Plc and HSBC Holdings Plc may be active after S&P lowered their ratings. Daimler AG, the maker of Mercedes cars, may move after JPMorgan Chase & Co. cut its recommendation on the stock.

Futures on the Euro Stoxx 50 Index, a benchmark for the euro region, fell 1.2 percent to 2,207 at 7:02 a.m. in London. Futures on the U.K.’s FTSE 100 Index retreated 0.8 percent. Futures on the Standard & Poor’s 500 Index expiring in December slid 0.9 percent, while the MSCI Asia Pacific Index lost 0.5 percent.

The Stoxx Europe 600 Index has dropped 4.9 percent this month, for the biggest decline since August, as Italian bond yields surged and European policy makers struggled to agree on a plan to contain the region’s sovereign-debt crisis.

“News that S&P had downgraded some of the world’s biggest banking institutions took the shine off market sentiment,” Jonathan Sudaria, a trader at London Capital Group, wrote in a note.

Goldman Sachs Group Inc., Bank of America Corp. and UBS led the world’s biggest banks in having their ratings cut by S&P as debt of financial firms heads for its worst month since the credit crisis.

S&P cut its rating on UBS to A from A+, according to a report yesterday after European markets closed. The rating company also downgraded Barclays to A from A+, and HSBC to A+ from AA-, according to the report.

--Editor: Srinivasan Sivabalan

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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