ETFs that invest in major European equity benchmarks were set for a green open Friday despite Standard & Poor’s hacking its credit rating on Spain down by two notches. Yields on Spanish 10-year government bonds did spike up close to the critical 6% level, however.
European markets were calmed by reports of solid bond auctions in Italy. Spain’s IBEX 35 rose about 2% while in Italy, the FTSE MIB added 1.4%.
ETFs tracking these two markets include iShares MSCI Italy (NYSEArca: EWI) and iShares MSCI Spain (NYSEArca: EWP). Both funds have shed more than 10% over the past month with renewed concerns over Spain’s finances thrusting the European debt crisis back into the headlines.
The Spain ETF is trading near the lows from March 2009. [Spain ETF Lowest in Three Years]
The country’s struggling economy faces a “crisis of huge proportions,” a minister said in a Reuters report Friday.