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Capital Markets

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Categorized | Equities

Banks lead falls after Spanish downgrades

Posted on April 30, 2012

Share prices across Europe fell yesterday, reversing gains last week, after Spain slid into recession.

“This is a rolling crisis that goes up and down. Markets were generally up last week and they are down this week,” Karen Olney, strategist at UBS, said.

    The FTSE Eurofirst 300 index inched down 0.8 per cent to 1,043.28.

    In Madrid, the Ibex 35 tumbled 1.9 per cent to 7,011 after the government released first-quarter data revealing the Spanish economy contracted 0.3 per cent from the previous quarter.

    Banks led the decline as Standard & Poor’s downgraded 11 of Spain’s largest banks.

    Banco Santander
    , Europe’s largest bank by market capitalisation, shed 2.5 per cent to end at €4.72, while shares in BBVA
    fell 2.2 per cent to €5.11.

    In Paris, the CAC 40 slipped 1.6 per cent to 3,212.80 with tech companies leading the decline.

    , the parent company of ST-Ericsson, fell 5 per cent to €4.29 after Moody’s changed its outlook for the company to negative, affirming its Baa1 rating.

    In Frankfurt, the Xetra Dax fell 0.6 per cent to 6,761.19 despite gains for Adidas

    The German sports goods group’s shares climbed to a record after it raised its profit forecast on strong performance in China.

    The shares jumped nearly 5.3 per cent to close at an all-time high of €63, as the company announced better than expected first-quarter results, with revenues up 17 per cent to €3.8bn.

    Retailer Metro
    ’s shares also rose 2.6 per cent to €24.38.

    However, shares in BASF
    , the world’s biggest chemical maker, fell sharply, down 4.7 per cent to €62.19.

    dropped after ING cut its price target for the company’s share price from SFr20 to SFr19. The Swiss electrical engineering group fell 3.8 per cent to SFr16.54.

    was among Europe’s biggest gainers as shares rose 5.2 per cent to NKr105.2 after the Norwegian telecoms company said it had written down the rest of its NKr3.9bn business in India.

    This is the second writedown Telenor has made since India’s Supreme Court revoked its mobile licence in India.