A single-country exchange traded fund indexed to France traded higher Wednesday, following European stocks despite Moody’s downgrading a pair of French banks.
Societe Generale and Credit Agricole were cut by Moody’s, which cited exposure to Greek debt, Reuters reported.
“But the euro and European stocks were lifted by an announcement by the head of the European Commission that it would soon present options for issuing a common Eurozone bond, despite huge political hurdles especially in Germany,” according to the article.
A conference call was scheduled for later Wednesday between Greek Prime Minister George Papandreou, French President Nicolas Sarkozy and German Chancellor Angela Merkel.
The iShares MSCI France (NYSEArca: EWQ) rose 2% in U.S. trading.
Manager BlackRock said the France ETF was seeing heaving trading volume Wednesday. It said exposure to SocGen and Credit Agricole is fairly low at about 3% combined of the portfolio.
“France is in the forefront today with Moody’s downgrading the credit ratings of SocGen and Credit Agricole, two of the country’s largest banks. Both stocks have come off their session lows to rally going into the European market close,” BlacRock added.
In precious metals, gold ETFs continue to be supported by worries over Europe’s debt crisis.
“European banks are losing deposits as savers and money funds spooked by the region’s debt crisis search for havens, a trend that could worsen economic and financial conditions,” Bloomberg reported Wednesday.
iShares MSCI France - (Click chart to enlarge)