European stocks opened Friday at some their lowest levels in months after ratings agency Moody's downgraded 16 Spanish banks, but regained some of their losses as trading on the continent's main bourses remained volatile. The initial slide also came off the decision Thursday by another ratings agency, Fitch, to cut Greece's credit rating to CCC from B-,a move reflect concern over the country's possible exit from the euro. The benchmark Stoxx Europe 600 Index at one stage dropped 0.8 percent to 239.63 after closing on Thursday at 241.63 points. However, by mid-morning it was just 0.1 per cent lower. In London the FTSE 100 Index fell 0.7 per cent while Frankfurt's AX index dipped 0.5 per cent and Paris' CAC 40 was 0.8 per cent lower. Smaller markets also initially reflected the impact of Moody's decision to downgrade the credit ratings of the Spanish banks, with the bourses in Madrid and Milan opening down by 1.93 and 1.25 percent respectively. Meanwhile both Spain and Italy's borrowing costs remained high amid lingering fears of debt contagion from Greece. Spanish 10-year bonds fetched an interest of 6.32 per cent compared to 6.31 per cent on Thursday. The spread on benchmark German bonds stood at 492 basic points, but later slipped to below 490. Yields on 10-year Italian bonds were at 5.88 per cent while after climbing to 448 basic points the spread with German bonds declined to436 points by late morning trading.
