European shares bounce back after France loses credit rating
WORLD shares fell slightly yesterday morning after France lost its top credit rating from Moody's but stocks rallied in late trading.
The downgrade also had a knock-on effect for Ireland as the European Financial Stability Facility "might delay" a new three-year benchmark bond following the downgrade of its second largest guarantor.
By the close of trade, European shares were about break-even. Analysts said France's downgrade had been expected and was largely priced-in. "Global equity markets are trading flat to slightly positive this afternoon after France unexpectedly lost its top AAA credit rating," Justin Doyle of Investec Bank Ireland said yesterday evening.
The dollar rose against the euro in the morning but fell in late trading.
Crude prices fell to $111 a barrel as concern over Europe's economy also pressured oil and other commodities after Moody's decision.