Moody39;s downgrades France39;s rating
French services sector shrinks further in December
Porsche falls after big impairment on Volkswagen stake

Dec 16 Reuters French stocks led losses across European markets on Monday after a surprise ratings downgrade by Moody39;s, while signs of easing strain on euro zone business activity failed to enthuse investors.

France39;s bluechip CAC 40 dropped 0.7 after credit ratings agency Moody39;s unexpectedly downgraded the country39;s rating on Friday, bringing it to Aa3 from Aa2 with a stable outlook for future moves.

The news came hours after President Emmanuel Macron named veteran centrist politician Francois Bayrou as his fourth prime minister this year.

French banks including Societe Generale, BNP Paribas and Credit Agricole dipped.

Surveys showed Germany39;s economic downturn eased slightly in December but business activity still contracted for a sixth month running, while France39;s services sector shrank further in December.

Overall the decline in euro zone business activity eased this month as the bloc39;s dominant services industry bounced back to growth, as per HCOB39;s preliminary composite euro zone Purchasing Managers39; Index.

That39;s not much of a silver lining as it largely reflects the pessimism baked into economists39; forecasts, noted Jack AllenReynolds, deputy chief eurozone economist at Capital Economics. The PMI is still lower than it was in October, and on past form remains consistent with the economy…