14 Jan 2012

Markets fall on rating downgrade rumours

1:38 pm on 14 January 2012

World stock markets fell on Friday on reports that Standard & Poor's was about to downgrade some eurozone countries.

France has lost its AAA ratings and the Austria also did so.

However, Germany did not lose its AAA rating. Belgium, the Netherlands and Luxembourg were also not affected.

S&P declined to comment, but an announcement was expected on Friday.

The euro hit a new 16-month low against the dollar of $US1.263, before rebounding. It also dropped against the pound.

The FTSE 100 in London was down 0.5% and the DAX in Frankfurt was down 0.6%. The CAC 40 in Paris fell by 0.11%.

The Dow Jones in New York fell 0.8% and the Nasdaq by 0.81%.

For the week, the Dow rose 0.5%, the S&P 500 advanced 0.9% and the Nasdaq gained 1.4%.

In August, S&P downgraded the AAA rating of the United States.

Oil prices dipped on Friday. West Texas Intermediate for delivery in February fell 40 cents to $US98.70 per barrel.

Brent North Sea for February dropped 82 cents to $US110.44.

The Australian share market closed at its highest for a month on Friday, following strong bond auctions in Spain and Italy.

The ASX 200 index finished 0.4% higher at 4,196 and the All Ordinaries Index posted a similar gain to close at 4,255.