LONDON (ShareCast) - The recovery in European stocks has been halted by a worrying warning from the credit ratings agency Standard & Poor’s.

S&P’s statement last night that 15 of the 17 countries which use the euro are to be put on a “negative credit watch” has seen confidence ebb out of European indexes after a week long rally.

At 12:25 in Paris the CAC 40 was down 0.17% at 3,196, in Frankfurt the DAX 30 was down 0.62% at 6,068. In Milan the FTSE MIB had fallen 0.23% but the IBEX 35 in Madrid was keeping its head above water, making 0.07% on the open to hit 8,712.

The Stoxx Europe 600 index, which is used a benchmark of the broad performance of European equities, was very slightly down on the open at 242.65, a fall of 0.04%.

The fall in share prices has been relatively restrained, perhaps because while the S&P warning is a worry, there has been some good news for investors, notably October factory orders in Germany came out 5.2% higher than September, significantly better than the consensus forecast of a 0.8% gain.

There are also expectations that the Reserve Bank of Australia may cut interest rates later today as central banks around the world attempt to counter the Eurozone debt crisis.

Some notable stock performances today include the Norwegian fertiliser producer Yara International which has gained 1.35% on comments from its chief executive that “fertiliser demand is strong in all regions”.

RWE, the German utility company has fallen sharply, down 8.57%, on news of a capital raising that will see it issue new shares equivalent to 15% of its current issued capital.

Veolia Environnement has risen 8.89% in Paris on news it plans to eliminate its mass-transit business line and focus on its water, waste and energy services divisions.

OTHER MARKETS

Brent Crude for January delivery had climbed 0.25% at 11:50 in London to $110.08 per barrel.

Gold futures were trading down 0.65% at $1,723 per ounce

At 12:51 in Paris the euro was very slightly (+0.0058%) against the dollar at $1.3402

BS

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