Markets on losses on Spanish downgrading and Libya unrest (ISFM) (10-03-2011)

Thursday’s trading opened amid worries over Libya unrest and Spain’s rate cutting.

Tensions in Libya intensified, after warplanes sent by forces loyal to Muammar Gaddafi bombed the eastern oil town of Brega Thursday, extending attacks deeper into rebel-held territory.

Spain on the other hand came under downgrading on the credit rating by Moody’s, citing worries over the cost of the banking sector's restructuring, the government's ability to achieve its borrowing reduction targets and grim economic growth prospects.

The agency reduced Spain's rating by one notch to Aa2 and warned that a further downgrade is possible if indications emerge that Spain's fiscal targets will be missed, and if the public debt ratio increases more rapidly than currently expected.

U.S. stock futures were in decline after Asian and European markets losses, as data showing an unexpected trade deficit in China soured investors’ mood.

Asian stocks finished sharply lower after the Chinese data, with the Shanghai Composite Index closing down 1.5%, Japan’s Nikkei Stock Average losing 1.5%, and South Korea’s Kospi down 1%.

Crude oil futures fell on Thursday on a stronger dollar revealing fresh worries over euro zone debt crisis.

Source: ISFM