LONDON - Financial markets are unlikely to be derailed by mass euro zone downgrades but with Greek debt talks at an impasse, pressure has been loaded on the bloc to shore up its defenses and glimmers of optimism from last week have been firmly doused.
With the United States and Japan already downgraded from "AAA" the likes of France and Austria are in good company and Standard & Poor's ratings cuts had been flagged in December. Nonetheless, the upbeat tone that surrounded last week's strong Spanish bond auction now seems a distant memory.
"The euro zone crisis is now dominating market activity again, after a period in which better economic news from the US, and easier monetary policy in China had helped markets move higher," said Dominic Rossi, chief investment officer, equities, at Fidelity Worldwide Investment.
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