The FTSE 100 dropped 19 points (0.3 percent) to 5,997 this morning after Moody’s downgraded the debt-laden Portugal by one notch from A3 to Baa1.
TUI Travel (LON:TT) led the blue chips, surging 4 percent after its largest shareholder, Hanover-based TUI AG, announced that it is in discussion over the potential sale of its stake in Hapag-Lloyd, fuelling speculation that the proceeds will be used to up its shareholding in TUI.
Investment vehicle Resolution (LON:RSL) advanced 3 percent after Citigroup (NYSE:C) raised its price target for the group from £3.31 to £3.67 per share.
Shares in Barclays (LON:BARC) dropped 2 percent, making it the biggest faller in the FTSE 100, after a report in the Financial Times said that the bank’s new chief executive Bob Diamond is considering increasing its risk profile to meet profit targets set for the next three years. FT also said that equity returns are set to fall below 7 percent after reaching 7.2 percent in 2010.
Vodafone (LON:VOD) declined 1.5 percent after Nomura lowered its price target for the stock from 220 pence to 215 pence per share, while retaining its “buy” recommendation in view of the tax penalty proceedings initiated against the mobile operator in India.
In Asia, Japan’s benchmark Nikkei 225 index fell 103 points (1.05 percent) to 9,615.
Traders are expecting a lower open on Wall Street today. Futures for the technology heavy NASDAQ composite slipped 0.7 percent, while the S&P 500 and Dow Jones indexes were down 0.2 percent.
Shares in National Semiconductor (NYSE:NSM) soared 72 percent in pre-market. Expedia (NYSE:EXPE) rallied 3.8 percent. Analog Devices (NYSE:ADI) and Nvidia (NYSE:NVDA) climbed 2 percent.
Pultegroup (NYSE:PHM) slid 8 percent. Texas Instruments (NYSE:TXN) declined 3.2 percent.
Today’s US data will include minutes from the Federal Reserve’s Open Market Committee (FOMC) latest meeting and the Institute for Supply Management’s non-manufacturing index.