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European Markets Slide Amid Portugal Concerns
European equities retreated on Wednesday as banking stocks slipped after Moody's cut Portugal's credit rating to 'junk' and said the highly indebted country may need more bailout funds.
A 5 percent jump in the Euro STOXX 50 volatility index , one of Europe's main barometers of market sentiment, suggested a decline in investor appetite for riskier assets such as equities.
Portugal's PSI 20 was down 2.5 percent at 0846 GMT, with volumes hitting 75 percent of its 90-day daily average, while the FTSEurofirst 300 index of top European shares was down 0.3 percent at 1,118.36.
Banks were the top losers, with the Thomson Reuters Peripheral Eurozone Banks index down 3.5 percent and the European bank sector off 1.6 percent. Portuguese bank Millennium bcp declined 5.6 percent, while Italian lender Unicredit lost 4.5 percent.
"Certainly Moody's comment over Portugal is a concern for the market. Investors are also just trying to position themselves ahead of Friday's U.S. non-farm payrolls figures," said Keith Bowman, equity analyst at Hargreaves Lansdown.
Moody's cut Portugal's credit rating at a time when concerns over Greece were easing. Moody's move reminded investors Europe's debt crisis extended beyond Greece and countries such as Ireland, Spain and Italy might also need support.
A 5 percent jump in the Euro STOXX 50 volatility index , one of Europe's main barometers of market sentiment, suggested a decline in investor appetite for riskier assets such as equities.
Portugal's PSI 20 was down 2.5 percent at 0846 GMT, with volumes hitting 75 percent of its 90-day daily average, while the FTSEurofirst 300 index of top European shares was down 0.3 percent at 1,118.36.
Banks were the top losers, with the Thomson Reuters Peripheral Eurozone Banks index down 3.5 percent and the European bank sector off 1.6 percent. Portuguese bank Millennium bcp declined 5.6 percent, while Italian lender Unicredit lost 4.5 percent.
"Certainly Moody's comment over Portugal is a concern for the market. Investors are also just trying to position themselves ahead of Friday's U.S. non-farm payrolls figures," said Keith Bowman, equity analyst at Hargreaves Lansdown.
Moody's cut Portugal's credit rating at a time when concerns over Greece were easing. Moody's move reminded investors Europe's debt crisis extended beyond Greece and countries such as Ireland, Spain and Italy might also need support.
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