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European stocks declined as the region’s central bank paused lending to some Greek banks and speculation mounted that Spanish banks may have their credit ratings cut at Moody’s Investors Service.
The Stoxx Europe 600 Index dropped 1.1% at the close of trading, for the longest losing streak since March 22
Moody’s Investors Service is set to downgrade the credit ratings of Spanish banks later today, said two people with knowledge of the situation, who asked not to be identified because the decision hasn’t been announced.
The nation sold the maximum amount of notes targeted at a bond auction today as borrowing costs rose and 10-year bond yields approached levels that drove Greece and Portugal into bailouts.
National benchmark indexes declined in all 10 western European markets open today. The U.K.’s FTSE 100 , Germany’s DAX and France’s CAC 40 all dropped 1.2%. Greece’s ASE lost 3.4% to the lowest level since January 1990. Exchanges in Switzerland, Norway, Sweden, Denmark, Finland, Austria, Luxembourg and Iceland were closed for the Ascension holiday.
Spanish lender Bankia tumbled 14 %. The stock has dropped for 10 consecutive days, losing 42 %. El Mundo reported that customers have withdrawn 1 billion euros since May 9, when the government said it will take over the bank.
Cookson jumped 5.5 % to 679 pence, the biggest increase since April 2. The world’s biggest maker of ceramic linings for metal smelters said it has started a strategic review and may split its main divisions.
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