Moody's Investors Service on Monday cut Ireland's sovereign debt rating by one notch to Aa2 from Aa1, citing the government's "gradual but significant loss of financial strength."
The agency said weakening debt affordability, lower economic growth prospects due to the severe downturn in the banking and real estate sectors, as well as liabilities from the bailout of the banking sector all contributed to the downgrade, MarketWatch reports.
European shares struggled to make gains after Moody's downgraded Irish government bonds by one notch, to Aa2 from Aa1, due to a deteriorating economic outlook. Meanwhile, news that talks between Hungary and the IMF and EU over an existing assistance program broke down over the weekend also weighed on sentiment. Hungarian markets were hit hard by the news.
On the economic front, the National Association of Home Builders releases its monthly sentiment index at 10 am New York time, with economists looking for a reading of 16 in the monthly survey, down a point from June's reading of 17, CNBC informs.