Eu­ro­pean stocks dropped for a sec­ond day as Moody's In­vestors Ser­vice down­grad­ed Spain and Cyprus, while Switzer­land's cen­tral bank said that Cred­it Su­isse Group AG (CS­GN) must in­crease its cap­i­tal this year. The Stoxx Eu­rope 600 In­dex (SXXP) dropped 0.3 per cent to 241.84 at the close of trad­ing, ex­tend­ing its slide from this year's high on March 16 to 11 per cent. "The big news ob­vi­ous­ly is Spain is tick­ing up, so the ques­tion is how long can they sus­tain this be­fore hav­ing to go back for more funds," said Chris Beauchamp, a mar­ket an­a­lyst at IG In­dex in Lon­don. "It's the ris­ing yields and then you fac­tor in the Ital­ian yields and then ob­vi­ous­ly you have the Greek elec­tions so you've got a per­fect storm brew­ing."

The VS­toxx In­dex, a mea­sure of Eu­ro Stoxx 50 In­dex op­tions prices, slipped 2.5 per cent to 33.01, snap­ping three days of gains. The vol­ume of shares trad­ing on the Stoxx 600 to­day was 18 per cent high­er than the av­er­age of the last 30 days, ac­cord­ing to da­ta com­piled by Bloomberg. Na­tion­al bench­mark in­dex­es gained in ten of the 18 west­ern-Eu­ro­pean mar­kets to­day. The UK's FTSE 100 dropped 0.3 per cent and Ger­many's DAX slipped 0.2 per cent. France's bench­mark CAC 40 added 0.1 per cent. Greece's ASE In­dex ral­lied ten per cent for its biggest climb since Au­gust. Moody's cut Spain's rat­ing by three steps to Baa3 from A3 late yes­ter­day, cit­ing the na­tion's in­creased debt bur­den, weak­en­ing econ­o­my and lim­it­ed ac­cess to cap­i­tal mar­kets. Moody's al­so low­ered Cyprus's bond rat­ing to Ba3 from Ba1. (AP)