Royal Bank of Scotland leads banks lower on sector downgrade

| March 18, 2010 | 0 Comments
Royal Bank of Scotland leads banks lower on sector downgrade

European equities markets were lower Thursday, with banks and miners both lower in London.

The FTSE 100 and the FTSE 250 each dropped 0.04 percent in London, to 5,642.62 and 10,004.18 respectively.

The five biggest decliners on the 100 were all either banks or miners, led by Royal Bank of Scotland (LSE: RBS), which was down 3.56 percent after it said its pension deficit, already up 46 percent, could rise more, and after Citigroup downgraded the global financial sector from “overweight” to “neutral”.

Lloyds Banking Group (LSE: LLOY) was right behind RBS with a decline of 3.17 percent.

Vedanta Resources (LSE: VED) led declines among miners as it dropped 2.35 percent, while gold and silver miner Fresnillo (LSE: FRES) was down 2.05 percent and Kazakhmys (LSE: KAZ) fell 1.83 percent.

Not all miners were lower, however, with gainers led by iron-ore miner Ferrexpo, which added 1.2 percent.

Most pharmaceuticals groups were higher on the session as GlaxoSmithKline (LSE: GSK) led gains on the 100 as it added 3.88 percent, while Hikma Pharmaceuticals added 4.48 percent over on the 250 to lead gains in the sector.

The biggest advance in London came from electronic components distributor Premier Farnell (LSE: PFL), which added 9.84 percent on the 250, while another electronics components distributor, Electrocomponents (LSE: ECM) gained 4.6 percent.

Oil and gas explorers provided both the best and worst performances in the energy sector as Wellstream Holdings (LSE: WSM) added 6.83 percent but Salamander Energy (LSE: SMDR) dropped 5.55 percent on the session.

Public transport operator Arriva (LSE: ARI) added 4.58 percent on an upgrade from UBS from “sell” to “neutral” and after Deutsche Bahn, Germany’s state rail company, expressed interest.

The FTSE Eurofirst 300 was down 0.18 percent to 1,068.93 while the Dax fell 0.2 percent to 6.012.31, the CAC-40 was 0.5 percent lower to 3,938.18 and the IBEX dropped 0.84 percent to 11,073.5.

Markets in the Asia-Pacific region were mixed.

The Nikkei 225 was 0.95 percent lower to 10,744.03 in Tokyo and the Topix index fell 0.7 percent to 940.79, but the Mothers market added 0.52 percent to 434.71.

Japanese exporters were hurt by the euro’s weakness versus the yen.

Mazda Motor (TYO: 7261), which sees 21 percent of it’s sales in Europe, was down 2 percent, while Honda Motor (TYO: 7267) dropped 1.5 percent on the session.

In the property sector, Mitsui Fudosan (TYO: 8801) was down 2.4 percent and Mitsubishi Estate (TYO: 8802) fell 3.8 percent after Morgan Stanley downgraded both to “underweight”.

Other decliners in the region included the Shanghai Composite, which was 0.14 percent lower to 3,046.09, while the Hang Seng fell 0.25 percent to 21,330.67 and the Kospi dropped 0.46 percent to 1,675.17.

The Sensex added 0.17 percent to 17,519.26 in India, while the Straits Times Index was up 0.18 percent to 2,913.94.

In Australia, the S&P/ASX200 was 0.2 percent higher to 4,863.1 and the Sydney Ordinaries gained 0.22 percent to 4.877.7.

One of the biggest gainers in Australia was shopping malls owner Westfield Group (ASX:WDC), which was up 2.2 percent after Deutsche Bank upgraded it from “hold” to “buy”.

Taiwan’s Taiex added 0.49 percent to 7,886.34.

Wall Street was mixed in early afternoon trade as the Dow Jones Industrial Average was up 0.34 percent to 10,769.95 and the Nasdaq Composite had gained 0.07 percent to 2,390.7 but the S&P 500 was down 0.12 percent to 1,164.81.

Crude oil prices were lower at early afternoon in New York, but metals were mixed as prices for copper and silver were lower but gold was higher.

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