BNP Paribas and Credit Agricole shares tumble

BNP Paribas and Credit Agricole shares tumble

Stock Market Predictions

LONDON/PARIS (Global Markets) - Shares in French lenders BNP Paribas (BNPP.PA) and Credit Agricole (CAGR.PA) dived on Friday, underperforming the European banking sector on growing concern about the euro zone debt crisis.

BNP Paribas shed more than 8 percent, while Credit Agricole lost 4.7 percent and Societe Generale (SOGN.PA) lost 0.9 percent. That compared with a 1.1 percent gain in the STOXX Europe 600 banking index .SX7P.

Two Paris-based traders blamed the drop on expectations that the Moody's agency may cut Italy's credit rating after the market close on Friday. BNP Paribas and Credit Agricole are the two French banks most exposed to Italy.

Further dampening sentiment was talk Germany had delayed discussing the European Stability Mechanism and that legislation for the rescue fund was not likely to be in place until early 2012.

Credit Agricole in particular was being hurt by its planned exit from the Stoxx 50 index, traders said.

The declines come at the end of a week in which the heavily sold French banking sector had shown signs of rebounding, although BNP is still down on the week.

(Reporting by Dominic Lau, Juliette Rouillon, Joanne Frearson and Elena Berton; Editing by David Hulmes)