BB leads London banking sector lower

European equities markets were lower Thursday after both the European Central Bank and the Bank of England held interest rates steady and investors continued to worry about slow economic growth.

ECB president Jean-Claude Trichet fed worries with his comments that Eurozone economic activity is “weak” even as he cautioned that inflation is still the Bank’s focus, while an ECB cut in its economic growth forecast for this year and next was also worrying.

Recent reports show that exports, consumer spending and business investment all fell in the Eurozone in the second quarter, while German factory orders were down by 1.7 percent in July and UK house prices fell by 10.9 percent in August.

In London, the FTSE 100 was down 2.5 percent to 5,362.1 while the FTSE 250 dropped 2.34 percent to 9,150.

The banking sector saw declines as Lloyds TSB (LSE: LLOY) was down 5.68 percent, Barclays Bank (LSE: BARC; NYSE: BCS; TYO: 8642) was 6 percent lower, HBOS (LSE: HBOS) fell 6.84 percent and Bradford & Bingley (LSE: BB) dropped 7.6 percent, while miners, retailers and the real estate sector were all lower.

Consumer products manufacturer Unilever (LSE: ULVR; Euronext: UNA; NYSE: UN) was a bright spot in London, where it added 6.11 percent to lead the 100 after it said it has appointed a new CEO.

The FTSE Eurofirst 300 was down 2.59 percent to 1,151.30 while the Dax fell 2.91 percent to 6,279.57, the IBEX was 3.11 percent lower to 11,480.1 and the CAC-40 dropped 3.22 percent to 4,304.01.

There was only one winner on the CAC-40 as cosmetics group L’Oreal (Euronext: OR) added 0.19 percent, while the steel sector and chipmakers declined, with Infineon (FWB: IFX; NYSE: IFX) down 5.3 percent while STMicroelectronics (Euronext: STM; NYSE: STM) dropped 5.58 percent.

Almost all equities markets in the Asia-Pacific region were lower Thursday, while the Shanghai Composite defied trends but gained a bare 0.03 percent to 2,277.41.

In Tokyo, the Nikkei 225 was 1.04 percent lower to 12,557.66 while the Topix index was down 1.55 percent to 1,201.65 and the Mothers market of small and mid-caps dropped 4.13 percent to 430.26.

Shippers were lower in Tokyo and in the rest of Asia after shipping rates dropped amid fears that demand for shipments from Asia will decline and after UBS (NYSE: UBS; SWX:UBSN; TYO: 8657) cut its recommendation on containers shippers in the region to “negative” on new data from the Japan Maritime Center showed that shipments from Asia to the US were down 18 percent in June.

Nippon Yusen (TYO: 9101) fell 5 percent while Kawasaki Kishen Kaisha (TYO: 9107) was down 5.9 percent and Mitsui OSK (TYO: 9104) dropped 7.3 percent.

Glassmakers were lower an a drop in demand for television screens and after US glassmaker Corning (NYSE: GLW) cut its third quarter forecasts on earnings and sales.

Asahi Glass (TYO: 5201) was down 3.4 percent while Nippon Electric Glass (TYO: 5214) dropped 14 percent.

Elsewhere in the region, South Korea’s Kospi was down 0.03 percent to 1,426.43 even as shipbuilder Hanjin Heavy Industries and Construction (KRX: 097230) added 6.7 percent on a new contract worth $339 million.

The Hang Seng was down 0.95 percent to 20,389.48 while India’s Sensex fell 1 percent to 14,899.1.

In Australia, the Sydney Ordinaries dropped 1.55 percent to 5,050.9 and the S&P/ASX200 was 1.59 percent lower to 4,979.5 while Taiwan’s Taiex was down 2.62 percent to 6,412.63 and the Straits Times Index dropped 2.97 percent to 2,626.05.

Worries about economic growth hurt Wall Street in early afternoon trade, where the Dow Jones Industrial Average was down 2.29 percent to 11,268.27, the Nasdaq Composite was 2.32 percent lower to 2,279.57 and the S&P 500 dropped 2.26 percent to 1,246.15.

Farm equipment manufacturer Caterpillar (NYSE: CAT) was 5.4 percent lower after a profit warning elsewhere in the sector.

Discount retailer Wal-Mart (NYSE: WMT) added 1.6 percent on better-than-expected sales last month even as other retailers reported that back-to-school sales did not match projections.

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