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.
Spain’s unemployment rate stood at 24% in the first quarter, the highest level since the early 1990s and one of the worst jobless figures in the world, according to the article.
“The figures are terrible for everyone and terrible for the government … Spain is in a crisis of huge proportions,” Foreign Minister Jose Manuel Garcia-Margallo said in the report.
With about $2.6 billion in assets, Vanguard MSCI European ETF (NYSEArca: VGK) is the largest diversified fund for Europe.
iShares MSCI Spain
