European stocks fall on Italy fear

Traders work on the floor of the New York Stock Exchange (NYSE)

Reuters

European shares fell in afternoon trading yesterday as relief over Moody's decision to keep Italy's sovereign rating outlook stable was short-lived and the focus turned to Europe's response to Rome's budget plans.

The pan-European STOXX 600 index fell 0.27pc, near the close, on track for its fourth day of losses. The European benchmark index rose as much as 0.7pc in early deals after the rating agency on Friday cut Italy to one notch above junk status because of concerns over government budget plans, but said the outlook was stable.