European equity markets extended losses today after Moody’s cut Greece’s debt rating by three notches to Caa1, indicating there is a 50 percent chance the country will default on its debt. The rating agency cited concerns that Greece will fail to meet its obligations under the bailout deal it received last year.
In addition to that, yesterday’s US data delivered another blow to recovery hopes, showing that job creation in the private sector slowed down, as did growth in the manufacturing sector with the Chicago PMI index falling to the lowest level since November 2009.
The UK’s FTSE 100 dropped 43 points (0.75 percent) to 5,885.
Government services group Serco Group (LON:SRP) was the top performer among the blue chips in London by a wide margin after Credit Suisse upped its price target from 670 pence to 720 pence. The stock rallied 3 percent to 589 pence. No other FTSE 100 constituent added 1 percent or more.
Kingfisher (LON:KGF) was among the heaviest fallers, slipping 2.5 percent to 275 pence after warning investors that the rest of the financial year is going to be tough for all retailers. Otherwise, the home improvement retailer’s report was strong, showing growth in sales and profits at the start of 2011. Sector peers Marks & Spencer (LON:MKS) and Next (LON:NXT) dropped 1.5 percent.
Other notable fallers included specialty chemicals firm Johnson Matthey (LON:JMAT), which dropped 2.7 percent to 2,024 pence on its full year report. The group reported an 11 percent increase in profits to £182.3 million as revenues climbed 27 percent to nearly £10 billion.
Financial bookmakers are expecting a higher open on Wall Street following yesterday’s sell-off, which saw the Dow Jones Industrial Average (DJIA) shed nearly 300 points. Futures for DJIA rose 16 points (0.15 percent) this morning. The broader S&P 500 index climbed 5 points (0.4 percent and the technology heavy NASDAQ composite added 12 points (0.5 percent).
Shares in Carnival Corp (NYSE:CCL) climbed 1.5 percent in pre-market. Bank of America (NYSE:BAC) added 1 percent.
Centurylink (NYSE:CTL) declined 1.1 percent.
Today’s US data will include jobless claims, Bloomberg’s consumer confidence survey, durable goods and factory orders.
Asian markets were in selling mode today. Japan’s benchmark Nikkei 225 index slipped 164 points (1.7 percent) to 9,555 and China’s Shanghai Composite Index shed 38 points (1.4 percent) to close at 2,705.