Portugal lags skittish European bourses on Espirito Santo woes

miércoles 9 de julio de 2014 06:52 GYT

* Lisbon's PSI 20 sinks 2.2 pct on Espirito Santo family debt worries

* FTSEurofirst 300 down 0.2 pct, Euro STOXX 50 up 0.2 pct

* Sodexo hit after poor update (Recasts with Portugal lagging)

By Francesco Canepa

LONDON, July 9 (Reuters) - Portuguese shares lagged European markets on Wednesday, hit by concerns about the financial health of one of the country's largest financial groups.

Lisbon's PSI index fell 2.2 percent, led by an 11 percent fall in Espirito Santo Financial Group (ESFG), the largest shareholder of Portugal's largest listed bank, Banco Espirito Santo.

Business daily Diario Economico reported on Wednesday Portugal's Espirito Santo banking family, who control ESFG, is set to propose to creditors an extension of the maturities of the debts issued by its Luxembourg-registered holding company.

The PSI, which has risen 24 percent in the past 12 months, has underperformed other European markets since concerns surrounding Espirito Santo arose as well as after some disappointing economic data came out last month.

"Investors are starting to wake up to this bad coffee," Franz Wenzel, chief strategist at AXA Investment Managers, said. "Also they've made fairly decent returns (on Portuguese shares) so why not taking profit and take some shelter."   Continuación...