By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets extended losses
in midday trade on Thursday after the Ukraine-Russia conflict
intensified, with a Ukrainian security spokesman accusing Russia of
shooting down one of Ukraine's jets.
The Stoxx Europe 600 index slid 0.8% to 340.29, after posting
the biggest one-day percentage gain since April on Wednesday.
Among notable movers in the pan-European index, shares of Banco
Espírito Santo SA slumped 11% after Standard & Poor's Ratings
Services late Wednesday lowered the lender's rating to B- from B+
and said it was keeping the long-term rating on negative watch. BES
shares soared 20% on Wednesday after the governor of the Bank of
Portugal said shareholders are ready to participate in a capital
increase, amid financial troubles at parent company Espirito Santo
International.
Shares of Sandvik AB gave up 3.3% after the Swedish engineering
group reported a drop in second-quarter profit.
Bucking the negative trend, shares of ITV PLC rallied 5.6% after
news that Liberty Global PLC (LBTYA) is buying a 6.4% stake in the
U.K. broadcaster for 481 million pounds ($824.18 million).
Russia sanctions
More broadly, European markets were hurt by escalating tensions
between Russia and Ukraine. A Ukrainian security spokesman said
Russia late Wednesday shot down an Air Force fighter jet with an
air-to-air missile. He also said Ukrainian troops had been fired
upon by missiles from a village just inside Russia. Pro-Russia
rebels claimed responsibility for strikes on two Ukrainian
Sukhoi-25 jets, media reports said.
The moves came as the U.S. and the European Union on Wednesday
each announced a new round of sanctions on Russia. The U.S. is
restricting access to the American debt market for some Russian
banks, energy companies and defense firms, while the EU said it
would announce detailed sanctions by the end of July.
Russia's MICEX index slumped 3% to 1,431.16 on Thursday.
State oil producer Rosneft was named as one of the sanctioned
firms, which sent the shares down 4.6% in Thursday's trade.
Jim O'Neill, the economist who coined the term "BRIC" and former
chairman of Goldman Sachs Asset Management, told CNBC on Thursday
that it's easy for the U.S. to make a noise with sanctions, as
there's not as much on the line as for Europe.
"For some parts of Europe, Germany and Italy in particular, it's
a big deal," he said.
Germany's DAX 30 index fell 0.8% to 9,784.06, while France's CAC
40 index lost 1% to 4,327.27. The U.K.'s FTSE 100 index dropped
0.6% to 6,742.32.
In data news, the final reading on euro-zone inflation for June
confirmed that consumer prices rose a meager 0.5% last month.
Among movers in Europe, shares of SAP SE (SAP) climbed 3.4%
after the German software company raised its full-year revenue
outlook for cloud applications.
More must-reads from MarketWatch:
9 reasons Apple's stock will keep rising
BlackRock results show a shift away from stocks? Not exactly
You may never have to buy another book again
Subscribe to WSJ: http://online.wsj.com?mod=djnwires