Shares of all major banks ended up contracting in Wednesday trading as doubts about Greece’s ability to stick to a stringent austerity plans sunk investor sentiment. While the €130 billion ($172 billion) bailout package for the troubled country from other European Union members will ensure that Greece does not default in the near future, the rather steep spending & budget curtailments laid out may prove impossible for it to adhere to.
Fitch Ratings’ decision to downgrade the country’s long-term debt rating to the lowest possible level of ‘C’ also did not help investor confidence.  And to make things worse, Markit’s Eurozone Services Purchasing Managers’ Index (PMI) shrunk more than expected, renewing fears of a double-dip recession for Europe. Shares of RBS (NYSE:RBS), Citigroup (NYSE:C), Barclays (NYSE:BCS) & Morgan Stanley (NYSE:MS) each shed around 3% of their value. The KBW Bank Index declined 2% over the day.
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