Global equities hurt by Washington Mutual failure

Equities markets in Europe saw declines Friday on delays in the approval of the US bailout plan and on the failure of US savings and loan Washington Mutual (NYSE: WM), which was seized by government regulators and sold to JPMorgan Chase (NYSE: JPM; TYO: 8634) for $1.9 billion.

In London, the FTSE 100 was down 2.09 percent to 5,088.47 while the FTSE 250 dropped 1.9 percent to 8,274.44.

Insurers were lower on broker downgrades as Aviva (LSE: AV) fell 3.4 percent on a Merrill Lynch (NYSE: MER; TYO: 8675) downgrade from “buy to “neutral” while Old Mutual dropped 9.7 percent, the worst performance of the day on the 100, after Merrill Lynch cut its rating from “neutral” to “underperform”.

The Eurofirst 300 was down 1.83 percent to 1,104.79 while the IBEX fell 0.44 percent to 11,387.9, the CAC-40 was 1.5 percent lower to 4,163.38 and the Dax dropped 1.77 percent to 6,063.5.

Asia-Pacific region equities markets saw declines as well.

In Tokyo, the Nikkei 225 was down 0.94 percent to 11,893.16 while the Topix index fell 0.53 percent to 1,147.89 and the Mothers market dropped 1.93 percent to 427.27.

Some banks managed small gains.

Elsewhere in the region, the Shanghai Composite was down 0.16 percent to 2,293.78 while in Australia the S&P/ASX200 was 0.46 percent lower to 4,904.8 and the Sydney Ordinaries fell 0.53 percent to 4,934.6.

The Hang Seng was down 1.33 percent to 18,682.09, the Straits Times Index fell 1.34 percent to 2,411.46, the Kospi was 1.68 percent lower to 1,476.33, the Taiex dropped 2.16 percent to 5,929.63 and the Sensex was down 3.28 percent to 13,102.18.

In afternoon trade in New York the Dow Jones Industrial Average had added 0.31 percent to 11,056.07 after JPMorgan Chase raised $10 billion in a stock sale and on the insistence by legislators that they will be able to agree on a bailout plan, but the Nasdaq Composite was down 0.62 percent to 2,173.03 and the S&P had dropped 0.33 percent to 1,205.19.

Crude oil prices were lower, while metals were mixed and grains prices fell.

The yen strengthened as squabbles over the bail out plan between US legislators reduced the popularity of purchases of higher-yielding currencies financed with the lower-yielding yen.

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