J Sainsbury leads supermarkets lower

European equities markets saw substantial declines Friday as worries continued that banks will lose more to the credit crisis and on new unemployment numbers out of the US Labor Department.

In London the FTSE 100 was down 2.26 percent to 5,240.7 in its biggest weekly decline since July 2002, while the FTSE 250 dropped 2 percent to 8,966.8.

UK supermarkets led the retail sector lower after Deutsche Bank (FWB: DBK; NYSE: DB) lowered its recommendation on Wm Morrison (LSE: WOS) from “buy” to “hold” and cut its rating on J Sainsbury (LSE: SBRY) from “hold” to “sell”.

Morrison dropped 2.9 percent on the session while Sainsbury was 3.3 percent lower.

Elsewhere in the region, the FTSE Eurofirst 300 was down 2.24 percent as the Dax fell 2.42 percent to 6,127.44, the CAC-40 was 2.49 percent lower to 4,196.66 and the IBEX dropped 2.97 percent to 11,139.7.

Asia-Pacific region equities markets were also lower.

In Tokyo, the Nikkei 225 was down 2.75 percent to 12,212.23 while the Topix index fell 2.56 percent to 1,170.84 and the Mothers market of small and mid-caps dropped 1.34 percent to 424.5.

South Korea’s Kospi was down 1.55 percent to 1,404.38 while the Taiex fell 1.64 percent to 6,307.28 and the Straits Times Index dropped 1.97 percent to 2,574.21 in Singapore.

In Australia, the Sydney Ordinaries fell 2.01 percent to 4,949.5 and the S&P/ASX200 was down 2.06 percent to 4,877.1 while in Hong Kong the Hang Seng dropped 2.24 percent to 19,933.28 as it fell below the 20,000 level for the first time since April.

The Sensex was down 2.79 percent to 14,483.83 while the Shanghai Composite dropped 3.29 percent to 2,202.45.

New data from the Labor Department showing that the US lost 84,000 jobs in August, taking the unemployment rate to a five-year high of 6.1 percent, had Wall Street tracking lower as recently as early afternoon.

However, by around 3 p.m. in New York only the Nasdaq Composite remained lower, falling 0.6 percent to 2,257.75 while the Dow Jones Industrial Average was up 0.25 percent to 11,216.08 and the S&P 500 had added 0.24 percent to 1,239.74.

Crude oil prices were lower in the US jobs news, while base metals and precious metals with the exception of gold were down as well.

Grains prices were also lower.

The pound was lower on yesterday’s Bank of England interest rate decision and predictions that the UK will fall into a recession by the end of the year, while the yen saw gains early but gave back most of those gains by later in the day.

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