Cyprus and Greek stocks dive on S&P downgrade

Cyprus and Greek stocks went into a free-fall on Wednesday after Standard & Poor's Ratings Services cut its credit ratings on Greece's sovereign debt o, due to falling economic competitiveness and a rising fiscal deficit worsened by the global crisis.
The Cyprus Stock Exchange (CSE) Index dived 5.2% on the day to close at a new record low of 1059.69 points with Cyprus’ two largest lenders, Bank of Cyprus and Marfin Popular Bank which have a huge presence in Greece taking the index sharply lower.
Bank of Cyprus closed at EUR 2.51/share, or a decline of 6.34% while Marfin Popular Bank ended 4.95% lower at EUR 1.92/share. Hellenic Bank, which also has a presence in Greece followed its peers by closing 3.85% lower at EUR 1.00/share.
The Athens General Index meanwhile also tumbled 5.47% to 1743.47 points with National Bank of Greece declining 6.91% to EUR 12.40, Alpha Bank down 7.98% at EUR 6.00, Eurobank down 4.51% at EUR 5.50 and Piraeus Bank down 5.66% at EUR 6.00/share.
Bank of Cyprus fell 7.04% on the ASE to end at EUR 2.51 while MPB closed 5% lower at EUR 1.90 per share.
S&P cut Greece's sovereign rating, already the lowest in the 16-nation euro zone, to A-/A-2 with a stable outlook from A-/A-1.
Greece was one of four euro zone countries warned by S&P in the last few days that it could cut its ratings for them as the credit crunch and rising unemployment worsened their economic outlook. Ireland, Spain and Portugal were the other countries to be warned.