Europe Roundup: Bearish trading

LONDON: European shares fell yesterday after Moody's warned the US may lose its top credit rating if politicians fail to agree an increase in the borrowing limit, and after Italian bond yields soared after an auction.

At 1049 GMT, the FTSEurofirst 300 index of top European shares was down 1 per cent at 1,088.70 points.

In late morning deals, London's FTSE 100 index fell 1.03 per cent to 5,845.73 points, Frankfurt's DAX 30 dipped 0.80 per cent to 7,209.43 points and in Paris the CAC 40 lost 1.23 per cent to 3,748.04.

Madrid plunged 1.13 per cent and the Milan exchange tumbled 1.56 per cent in value as the embattled Italian government was forced to accept record rates in a bond auction.

"Ahead of the EU bank stress test results on Friday, market tensions are likely to persist. The scenario of a nervous and volatile summer seems to be unfolding," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels. - Reuters