Stocks fall on debt woes of Greece and Portugal

Eurostoxx 50: 2,917.72 (–32.26) Frankfurt DAX: 7,146.56 (–31.41) Paris CAC: 3,970.39 (–39.84)EUROPEAN STOCKS declined yesterday, for the third time in four days as yields on Portuguese and Greek government bonds surged amid concern the countries may have to reschedule debt payments.

“There’s a risk there might be a restructuring of the Greek debt and the market is afraid of that,” said Martin Huefner, chief economist at Assenagon GmbH in Munich.

Greece’s ASE Index lost 2.8 per cent as the yield on the nation’s 10-year bond climbed above 13 per cent for the first time since 1998 after German finance minister Wolfgang Schaeuble told Die Welt newspaper that the Mediterranean country may need to restructure its debt. The cost of insuring Greek government debt rose 7 basis points to a record 1,068, according to CMA prices for credit-default swaps.

National Bank of Greece, Alpha Bank, Piraeus Bank and EFG Eurobank Ergasias all lost more than 5 per cent.

Portuguese 10-year yields added 14 basis points to 8.89 per cent, the highest since 1997, while two-year note yields were 28 basis points higher at 9.33 per cent.

Banca Popolare di Milano retreated 2.7 per cent to €2.71, the biggest drop this month.

Banking shares posted the worst performance among 19 industry groups in the Stoxx 600 yesterday, falling 1.4 per cent.

Banco Santander, Spain’s largest bank, slid 2.3 per cent to €8.31, while HSBC Holdings, Europe’s biggest bank, dropped 1.3 per cent to 653.3p.

Reckitt Benckiser sank 7.5 per cent to 3,115p, the largest decline in eight years.

Petroleum Geo-Services tumbled 6.1 per cent to 83.10 kroner, the biggest decline in five months. The world’s third-largest surveyor of oil and natural-gas fields said earnings were hurt by lower data licensing, higher fuel costs and unrest in North Africa.

Danone advanced 2 per cent to €47.76 as the world’s biggest yoghurt maker reported first-quarter sales that beat analysts’ estimates.

Nestle, the world’s largest food company, climbed 1.3 per cent to 53.25 Swiss francs, the biggest gain in three weeks.

Sulzer jumped 3.5 per cent to 148.7 francs for the best performance in the Stoxx 600.

– (Bloomberg)