Spain’s leading index dropped in afternoon trade on Thursday, over growing concerns over the budget deficit and growing debts. The fall followed a slide in Portuguese banking stocks as the country’s bonds slumped on growing concerns over the budget deficit and growing debts, drawing attention to other Eurozone periphery nations.
Spain’s Ibex 35 index lost 5.2 per cent to 10320.4, its lowest level since July 2009
Portugal’s Millennium BCP, the country’s biggest listed bank, extended its heavy losses after a sell-off by foreign funds fearful of a sudden rise in the cost of funding for the nation’s banking sector after Portuguese bond spreads over German Bunds were at their widest level for 10 months. Its shares fell to six month lows, down 5.8 per cent to €0.73. Its shares have slid 8.9 per cent since the start of the week.
Banco Espirito Santo fell 5.1 per cent to €3.80. Earlier the cost of insuring Portuguese government debt against default rose to a record high of €216,000 per €10m of exposure.
Portuguese stocks outside of the banking sector were also affected. Cable provider ZON Multimedia dropped 5.5 per cent to €3.80 while EDP Renovaveis the renewable energy unit of Portuguese utility EDP-Energias de Portugal declined 4.2 per cent to €5.92.
The selling came after the European Commission entered new territory by placing Greece’s economic and budgetary policies under closer surveillance than has been applied to any other eurozone country.
Analysts at BNP Paribas said: “The EC endorsement of the Greek fiscal plan provided little comfort as the market is now turning its attention to the other countries at the periphery of Europe, particularly Portugal and Spain.“
Market rumours that Spain was set for a downgrade, although denied by rating agencies, put the country’s stocks undder pressure.
Spain’s Santander, the eurozone’s biggest bank, weakened 3.8 per cent to €9.83 in spite of its having beaten profits forecasts. The bank diversified into emerging markets such as Brazil to offset the losses from a tough domestic market. BBVA, Spain’s second biggest listed bank lost 3.8 per cent to €10.37.
Meanwhile, Ireland’s Allied Irish Banks fell 5.5 per cent to €1.16 while Bank of Ireland dropped 5 per cent to €1.24.
Greek banks continued to weaken. EFG Eurobank lost 4.1 per cent to €6.13, Piraeus Bank fell 2.9 per cent to €6.02 and National Bank of Greece lost 3.3 per cent to €15.47.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web
Source:ft.com
No comments:
Post a Comment