European shares slip on Portugal bailout fears

LONDON, March 24 (Reuters) – European shares slipped in
early trade on Thursday, as caution persisted over the euro zone
debt crisis after Portugal moved closer to requiring a bailout.

By 0807 GMT, the pan-European FTSEurofirst 300 (.FTEU3: Quote, Profile, Research)
index of top shares was down 0.3 percent at 1,109.24 points,
with Portugal’s PSI 20 (.PSI20: Quote, Profile, Research) and Spain’s Ibex (.IBEX: Quote, Profile, Research) both
falling around 1 percent.

A bailout for highly indebted Portugal looked increasingly
likely after its prime minister resigned following parliament’s
rejection of the government’s austerity measures, in a move
which could prevent European Union (EU) leaders from taking
tough decisions to address the region’s debt crisis at a summit
on Thursday. [ID:nLDE72M2OC]

“If Portugal is going to require some loans from the (EU)
funding facility the risk is that if there is some difficulty
somewhere else the facility is going to be exhausted,” said Mike
Lenhoff, cheif strategist at Brewin Dolphin.

Falls in peripheral banks dragged the STOXX Europe 600
banking index (.SX7P: Quote, Profile, Research) down 0.6 percent, with sector was also
weighed down by ratings agency Moody’s cut to its ratings of 30
Spanish banks. [ID:nWEA0516]
(Reporting by Harpreet Bhal)

European shares slip on Portugal bailout fears