Europe open: Stoxx lower as Moody's cuts US credit rating

(Sharecast News) - European markets opened in the red on Monday after Moody's cut its credit rating for the US from the coveted AAA mark to AA1. The pan-regional Stoxx 600 index was down 0.57% in early deals at 546.70 with all major bourses following suit.

"The week starts with a jump in US yields and a weaker dollar after Moody's downgraded the US credit rating from the top Aaa to Aa1, citing concerns about the US' rapidly rising debt toward the $37 trillion mark and a budget deficit reaching 7% - the highest in peacetime," said Swissquote Bank analyst Ipek Ozkardeskaya.

"Moody's decision is unsurprising, as S&P and Fitch had already downgraded the US below AAA. If Moody's hadn't followed suit, it risked undermining its own credibility."

US government bonds were weaker, with the 30-year Treasury yield up to 5% from 4.89% on Friday night just before the downgrade.

In equity news, shares in BNP Paribas rose after the French bank unveiled a €1.08bn share buyback plan.

Reporting by Frank Prenesti for Sharecast.com