Bloomberg News

European Stock Futures Drop as Moody’s Downgrades Banks

May 18, 2012

European stock futures dropped, signaling the Stoxx Europe 600 Index will extend its longest losing streak in two months, after Moody’s Investors Service downgraded Spanish banks. U.S. futures and Asian shares fell.

Banco Santander SA (SAN) and Banco Bilbao Vizcaya Argentaria SA (BBVA) may lead a selloff by European lenders after Moody’s downgraded Spain’s biggest banks three levels. BHP Billiton Ltd. (BHP) may be active amid signs of slowing growth in China.

Futures on the Euro Stoxx 50 Index expiring in June slid 1.3 percent to 2,099 at 7:05 a.m. in London. Futures on FTSE 100 Index futures expiring the same month sank 1.3 percent, while contracts on the Standard & Poor’s 500 Index fell 0.3 percent after the gauge slumped to a four-month low yesterday. The MSCI Asia Pacific Index plunged 2.9 percent today.

“Asian stocks nosedived this morning over the European debt crisis,” said Nam Truong, a trader at Capital Spreads in London. “Contagion fears have gripped the markets with a storm closely brewing over Europe.”

The benchmark Stoxx 600 retreated for a fourth day yesterday, extending its selloff so far this week to 4.1 percent, as the European Central Bank temporarily halted lending to some Greek banks and speculation mounted that Moody’s would downgrade Spanish lenders.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

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


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