European Markets Remain Watchful On Renewed Euro Zone Concerns

By Bhaskar Prasad | June 12 2012 5:21 AM

European markets maintained a cautious tone Tuesday as stocks fell in the U.S. and Asia following the fading of optimism over the aid to the Spanish banks and fears of a revival of the debt crisis looming over the euro zone.

REUTERS

Traders work at their desks in front of the DAX board at the Frankfurt stock exchange January 16, 2012.

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The German DAX 30 index advanced 0.17 percent or 10.40 points to 6,151.45. Shares of E.On AG rose 2 percent and shares of Bayer AG gained 1.4 percent.

The French CAC 40 index rose 0.40 percent or 12.04 points to 3,054.80. Shares of Danone SA gained 1.2 percent.

London's FTSE 100 index rose 0.11 percent or 5.93 points to 5,438.30. Shares of the FTSE 100 index climbed 1.85 percent and shares of Unilever PLC advanced 1.42 percent.

Spanish banks Banco Bilbao Vizcaya Argentaria BBVA and Banco Santander were downgraded Monday by Fitch Ratings Agency to BBB+ from A. The downgrading was taken by investors as an indication that the Spanish bank bailout might not be sufficient to pull the country out of the financial crisis.

Spain's economic environment of sky-high unemployment and falling property prices hardly bodes well for the future profitability of the country's banks. So investors worry that the banking support package may help insulate Spain from the problems only for a while.