European stocks fall a second day

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)