Europe Shares Retreat Ahead of Italian Bond Auction, Spain Concerns

European stock markets retreated Thursday, as jitters ahead of a key Italian bond auction later in the day and anxiety about Spain’s credit rating weighed on investors’ mood and sent bond yields higher.

The Stoxx Europe 600 index (XX:SXXP) -0.90% was down 0.3% at 241.76.

Nokia Corp. NOK -2.79% (FI:NOK1V) -10.88% posted one of the biggest drops in the index, sliding 6% after it said it would cut 10,000 jobs and shuffle top management.

As Market Watch reported , the Spanish bonds came under intense selling pressure for another day, after Moody’s Investors Service late Wednesday cut the country’s credit rating to Baa3 from A3 and put it on review for a possible further downgrade.

Yields on 10-year Spanish government bonds (ES:10YR_ESP) +3.14% jumped 12 basis points to 6.89%, according to electronic trading platform Tradeweb.

The IBEX 35 index (XX:IBEX) -0.04% traded 0.1% lower at 6,605.90.

Italy’s FTSE MIB index (XX:FTSEMIB) -0.64% was also lower, down 0.1% to 12,879.01.

The Italian government later in the day will look to sell as much as 4.5 billion euros ($5.62 billion) of debt in what is widely perceived as a key test of market confidence in the country’s economy. Yields on 10-year Italian government bonds (IT:10YR_ITA) +0.81% rose 3 basis points to 6.25%, according to Tradeweb.

Oil firms weighed on stock indexes.

In France, the CAC 40 index (FR:PX1) -0.82% fell 0.2% to 3,025.68, pressured by STMicroelectronics (NVFR:STM) -3.67% , off 2.8%, and Peugeot SA FR:UG -2.91% , 2.2% lower.

German shares bucked the negative trend in Europe. The DAX 30 index (DX:DAX) -0.66% added 0.2% to 6,162.96, as Deutsche Bank AG (DE:DBK) -2.79% climbed 0.7%.