European shares opened sharply lower on Friday, on course for their biggest weekly decline since November, on heightened euro zone debt crisis concerns after Spanish banks were downgraded by Moody’s overnight and Fitch cut its debt rating for Greece.
The FTSEurofirst 300 was down 0.9 percent at 972.64 by 0700 GMT, its fifth straight day of declines, taking its weekly loss to 4.9 percent.
Spain’s benchmark IBEX 35 dropped 2.2 percent, floundering at levels last seen in 2003, after Moody’s cut the long-term debt and deposit ratings of 16 Spanish banks, including the euro zone’s largest, Banco Santander.
“European markets are still in a very fatalistic mood because of Greece and possible contagion,» said Lex van Dam, hedge fund manager at Hampstead Capital, which manages $500 million of assets.
“My view is that it is very likely that the ECB will step in before the situation spirals out of control, which will support the markets.» [Reuters]