LONDON, March 11 European shares paused early on
Monday around four-year highs as Italian banks took a hit after
Italy's credit downgrade, although equities remain supported by
unprecedented stimulus form governments and central banks.
By 0811 GMT, the FTSEurofirst 300 was down 1.71
points, or 0.1 percent, at 1,193.49, having closed at 1,195.20
on Friday -- a level not seen since September 2008 -- boosted by
strong jobs data in the world's largest economy and seemingly
unwavering support from central banks globally, which is
stabilising the global financial system and inflating asset
Eight of the top nine fallers in the European banking sector
, down 0.6 percent, were Italian banks where pressure
could grow to increase provisions against bad debt after Fitch
downgraded the country's credit rating by one notch to BBB-plus,
with a negative outlook, citing political uncertainty following
last month's inconclusive election.
Goldman Sachs cut its estimates across the board for Italian
banks as NPLs (non-performing loans) continue to rise and
coverage ratios continue to drop, while the pressure to take out
provisions is mounting.
Citigroup, meanwhile, said it expects Italian banks in its
coverage to report losses in fourth-quarter, due mostly to a
high level of provisions.