PARIS Nov 8 European stocks dropped in early
trade on Friday, slipping from five-year highs hit in the
previous session, as S&P's downgrade of France revived concerns
over the health of the euro zone.
At 0805 GMT, the FTSEurofirst 300 index of top
European shares was down 0.4 percent at 1,291.25 points, with
France's CAC 40 falling 0.6 percent.
S&P lowered its long-term sovereign credit ratings on France
by one notch to 'AA' from 'AA+'. It said high unemployment is
weakening support for further significant fiscal and structural
policy measures and that recent economic reforms will not
substantially raise the country's growth prospects.
"S&P's decision reflects the worries over French growth, and
the sentiment that government action is not enough," said
Philippe Waechter, head of economic research at Natixis Asset
Management in Paris.
"The French government sees the crisis as cyclical while S&P
thinks the problems faced by the country are structural, and the
credit agency sees the measures taken so far as insufficient."
French banking stocks featured among the biggest losers,
with Societe Generale down 1.3 percent and Natixis
down 1.2 percent.