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Wednesday 03rd of December 2008
October 13, 2008

Royal Bank of Scotland leads rescued UK banks lower

by Elaine Frei
Royal Bank of Scotland leads rescued UK banks lower

European equities markets saw gains Monday as governments in Europe and the US began to release more details on how they will help banks try to recover from the credit crisis.

In London the FTSE 100 was up 8.26 percent to 4,256.9 while the FTSE 250 added 3.72 percent to 7,030.35.

Bucking the trend of gains for banks in Europe, HBOS (LSE: HBOS) along with Lloyds TSB (LSE: LLOY) and the RBS (LSE: RBS; NYSE: RBS PRM) declined after they took advantage of a bailout offer from the UK government, with RBS down 8.37 percent, Lloyds falling 14.47 percent and HBOS dropping 27.54 percent although Barclays Bank (LSE: BARC; NYSE: BCS; TYO: 8642) was up 3.73 percent after it said it would try to raise capital privately.

The FTSE Eurofirst 300 was up 9.17 percent to 929.29 while the IBEX added 10.65 percent, the CAC-40 was 11.18 percent higher to 3,531.5 and the Dax gained 11.4 percent to 5,062.45 for the biggest one-day gain in its history, after declining 22 percent last week.

Trade in Iceland remained closed for the third consecutive session after bank seizures there last week.

Most equities markets in the Asia-Pacific region saw gains as investors began to gain confidence that efforts by governments to help banks will keep the current credit mess from deepening as banks it that region also announced plans to help banks weather the credit crisis.

Taiwan was the exception on the session, as the Taiex dropped 2.15 percent to 5,020.44 after being closed for a holiday on Friday as a ban on the short-selling of shares, due to expire tomorrow, was extended by regulators to the end of the year.

The Jakarta Composite added 0.7 percent on the session after a three-day closure due to steep declines there while the Shanghai Composite was up 3.65 percent to 2,073.57 and the Kospi was 3.79 percent higher to 1,288.53.

In Australia, the Sydney Ordinaries gained 5.14 percent to 4,141.9 and the S&P/ASX200 was up 5.55 percent to 4,180.7, while in Singapore the Straits Times Index was 6.57 percent higher to 2,076.35, India’s Sensex added 7.42 percent to 11,309.09 and in Hong Kong the Hang Seng jumped 10.24 percent to 16,312.16 as it gained over 1,500 points on the session.

New York equities markets also saw big gains in late afternoon trade with the Dow Jones Industrial Average up 7.81 percent to 9,110.83 while the Nasdaq Composite added 8.46 percent to 1,789.09 and the S&P 500 gained 8.2 percent to 972.97.

The Dow was up 659.64 points at nearly 3:30 p.m. in New York; a close anywhere over a 503.45-point gain would be a record for the biggest one-day point gain in the Dow’s history.

Crude oil, base metals and grains prices were higher while precious metals prices were mixed.

The euro and the pound were both stronger on the session on the plans by European governments to help banks.

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