Shares in Portuguese BES bank plunge on default fears

Shares in stricken Portuguese bank Banco Espirito Santo (BES) plunged further on Tuesday, sinking more than 20 percent at one point.
In mid-morning trading, shares in the biggest private bank in Portugal, were down 15.28 percent to 0.38 euros.
The BES crisis dragged down shares in two other Portuguese banks, BCP and BPI, and the overall  stock market was down 1.49 percent.
Investors are worried that one of the holding companies behind BES might default on debts.
On Monday, the price of the already weakened BES shares had fallen by 7.48 percent despite a change in the top management team at the bank.
Credit rating agency Fitch said the immediate repercussions of the problems at BES on other Portuguese banks were restricted for now but warned that the banking system was vulnerable to a loss of confidence.
Shares in Portugal Telecom were down 1.50 percent to 1.84 euros. In April the company had bought 897 million euros ($1.2 billion) worth of debt in one of the BES holding companies.
Of this, 847 million euros ($1.15 billion) is due to be redeemed on Tuesday.
This effective loan to Rioforte, the company which groups the two non-financial branches of the Espirito Santo group, was strongly criticised by Brazilian telecom operator Oi which is due to complete a merger with Portugal Telecom later this year.