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Monday 08th of February 2010
February 5, 2010    

ICAP leads London lower, drops almost 20 percent

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by Elaine Frei
ICAP leads London lower, drops almost 20 percent

European equities markets were lower again Friday as banks and miners continued to decline and investors worried about the health of the economic recovery.

The FTSE 100 was down 1.53 percent to 5,060.92 in London, while the FTSE 250 fell 2.04 percent to 9,035.91.

Inter-dealer money brokers, banks which handle transactions between other banks, had a rough day of it, leading declines on both the 100 and the 250 as ICAP (LSE: IAP) dropped 19.47 percent on the 100 after warning that its full-year results will not meet expectations, while Tullett Prebon (LSE: TLPR) fell 10 percent on the 250.

Banks were also lower, led by Lloyds Banking Group (LSE: LLOY), which fell 5.73 percent on the session.

Most miners were lower, with Xstrata (LSE: XTA) leading declines as it dropped 5.19 percent, but Talvivaara Mining Company (LSE: TALV) added 1.05 percent for the best of three gains in the sector.

Caterer Compass Group (LSE: CPG) added 5.19 percent on a positive outlook to lead gainers on the 100.

Other gainers included defense contractor BAE Systems (LSE: BA), which gained 1.59 percent after it agreed to pay fines totaling about $450 million to the US and the UK to settle an extended corruption probe, while Liberty International (LSE: LII) was up 0.97 percent as the only gainer in the real estate sector.

The FTSE Eurofirst 300 was down 1.87 percent to 974.39 while the IBEX fell 1.35 percent to 10,103.3, the Dax was 1.79 percent lower to 5,434.34 and the CAC-40 dropped 3.4 percent to 3,563.76.

There was only one gainer each on the Dax and the CAC-40.

Markets in the Asia-Pacific region were lower again Friday.

The Nikkei 225 was down 2.89 percent to 10,057.09 in Tokyo, while the Topix index fell 2.12 percent to 891.78 and the Mothers market dropped 2.37 percent to 397.6.

Troubled carmaker Toyota (TYO: 7203) managed to add 1.22 percent on positive broker comment, but Honda Motor (TYO: 7267) fell 3.73 percent and Nissan Motor (TYO: 7201) dropped 3.93 percent as exporters declined on a stronger yen.

Traders, meanwhile, declined on sinking oil and gold prices, with Mitsubishi Corp (TYO: 8058) down 3.29 percent while Mitsui & Co (TYO: 8031) was 4.58 percent lower.

Elsewhere in the region the Shanghai Composite was down 1.87 percent to 2,939.4 and the Straits Times Index fell 2.24 percent to 2,683.56, while in Australia the S&P/ASX200 was 2.33 percent lower to 4,514.1 and the Sydney Ordinaries dropped 2.4 percent to 4,532.5.

India’s Sensex was 2.68 percent lower to 15,790.93, the Kospi was down 3.05 percent to 1,567.12 in South Korea, the Hang Seng fell 3.33 percent to 19,665.08 in Hong Kong and Taiwan’s Taiex dropped 4.3 percent to 7,217.83.

New York markets were lower in midday trade, with the Dow Jones Industrial Average dropping below the 10,000 level on mixed news from the Labor Department, which reported that 20,000 jobs were lost to the US economy last month but that the unemployment rate fell to 9.7 percent in January, from 10 percent in December.

The discrepancy is due to the fact that the two statistics depend on different data.

Meanwhile, the underemployment rate, which includes part-time employees who want full-time work and workers who have become so discouraged that they’ve given up looking for a job, was down from December’s 17.3 percent but was still at 16.5 percent in January.

At midday in New York, the Dow was down 0.67 percent to 9,935.3 while the S&P 500 had also fallen 0.67 percent, to 1,056.01 and the Nasdaq Composite was 0.2 percent lower to 2,121.27.

Prices for oil and metals were lower again in midday trade in New York.

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