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March 24, 2010, 1:43 p.m. EDT

Europe's Rise Is Held Down By Portugal's Downgrade

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By Sarah Turner And Colin Ng

European shares inched higher on Wednesday, with a downgrade of Portugal's credit rating weighing on Iberian stocks while earnings results buffeted media firms.

After rising as high as 263.23 early in the session, the Stoxx Europe 600 index finished the session up a slight 0.1% to 262.12.

Early gains were mostly erased after a downgrade by Fitch Ratings of Portugal's credit rating to AA-minus from AA to reflect "significant budgetary underperformance in 2009."

The move hit Portuguese stocks and the Portuguese PSI 20 index lost 1% to 7997.33, with Banco Comercial Português down 1.2% and Portugal Telecom down 1.8%.

Elsewhere on the Iberian peninsula, the Spanish Ibex index declined 1.2% to 10867.30, dragged down by banking groups Santander, off 2.5%, and BBVA, down 1.5%.

The news on Portugal's rating means "you cannot maintain the view that this is an isolated problem. It's a symptom of too much debt in the system" said Philippe Gijsels , strategist at Fortis.

Greece has been at the center of Europe's fiscal worries but the Greek ASE Composite Index managed to rise 0.8% to 2062.94 ahead of a meeting of European officials that starts Thursday. "The markets have been hoping for a resolution to the Greek crisis," said Mr. Gijsels.

The major regional equity markets were mixed.

In LONDON , after Chancellor Alistair Darling delivered what may be his last budget, the U.K. FTSE 100 index finished the session up 0.1% to 5677.88. Though not constituents of the FTSE 100, British builders including Persimmon /zigman2/quotes/206444744/delayed UK:PSN -0.56% rose on a tax break for first-time buyers.

In FRANKFURT , the German DAX index rose 0.4% to 6039.00. Q-Cells was up 5.5% after the producer of solar cells said Wednesday it expects an increase in sales and improvement in operating income. Shares of Deutsche Börse rose 4.6% after the stock-exchange operator announced measures that would generate additional cost savings.

In PARIS , the CAC-40 index lost 0.1% to 3949.81. Alstom /zigman2/quotes/209823934/delayed FR:ALO -0.24% shares lost 1.7%. The U.K. Serious Fraud Office arrested three British directors of the French engineering group on allegations over bribery, money laundering and false accounting.

Meanwhile, Asian markets ended mostly higher, with strong corporate earnings boosting Hong Kong and Chinese stocks.

The tone for the markets was set by strong overnight gains on Wall Street. "Markets are saying they think the solid recovery in the U.S. manufacturing sector [and elsewhere for that matter] will continue and we are very much on board with that expectation," said David Carbon at DBS Group in Singapore.

In TOKYO , the Nikkei Stock Average climbed 0.4%, or 40.88 points, to 10815.03. Nintendo surged 8.7% on plans to release a new game console.

Australia's S&P/ASX 200 gained 0.3%, Taiwan's Taiex, China's Shanghai Composite and Hong Kong's Hang Seng Index rose 0.1% each, and South Korea's Kospi slipped 0.1%.

In MUMBAI , the India market was closed for a public holiday, the festival of Ram Navami.

Write to Sarah Turner at sarah.turner@dowjones.com and Colin Ng at colin.ng@dowjones.com

UK : U.K.: London
3,181.00 p
-18.00 -0.56%
Volume: 592,564
May 10, 2021 4:35p
P/E Ratio
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Market Cap
£10.20 billion
Rev. per Employee
FR : France: Euronext Paris
-0.11 -0.24%
Volume: 907,838
May 10, 2021 5:39p
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€17.32 billion
Rev. per Employee

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