European Market Commentary
11/20/2009 1:23 PM ET
(RTTNews) -
The European markets fell for the fourth day on Friday, as banking stocks declined after the European Central Bank said it has decided to amend the rating requirements for asset-backed securities to be eligible for use in Eurosystem credit operations and energy stocks edged lower after crude oil prices slipped.
According to an ECB press release, the Eurosystem will require at least two ratings from an accepted external credit assessment institution for all asset-backed securities issued as of March 1, 2010. In determining the eligibility of these asset-backed securities, the Eurosystem will apply the "second-best" rule, meaning that not only the best, but also the second-best available rating must comply with the minimum threshold applicable to asset-backed securities.
Crude for December delivery fell $0.56 to $76.90 a barrel on the new York Mercantile Exchange, by the time the European markets closed.
The FTSEurofirst 300 index of pan-European blue chips closed 0.77% lower at 1,002.95 points, while the narrower DJ Stoxx 50 index fell 0.83% to 2,467.99 points.
Around Europe, the U.K.'s FTSE 10 index fell 0.31% to 5,251.41, while France's CAC 40 index dropped 0.82% to 3,729.3601 and Germany's DAX index slipped 0.68% to 5,663.15.
National Bank of Greece and Alpha Bank both slid 5.8%, while EFG Eurobank Ergasias dropped 6.9% after the ECB said it is amending rating requirements for asset-backed securities to be eligible as collateral.
Heavily weighted oil stocks declined after crude oil prices fell. BP, Europe's biggest oil company, dipped 0.4%, while Royal/Dutch Shell, the second biggest, slipped 1% and Total, the third biggest, dropped 1.4%.
TUI Travel slid 4% and Thomas Cook dropped 4.3% after Morgan Stanley downgraded the two travel operators, citing a weaker operating environment and more expensive debt refinancing. TUI Travel was downgraded to "equal weight" from "overweight" and Thomas Cook was cut to "underweight" from "equal weight."
by RTT Staff Writer
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