WOS, SBRY lower on broker downgrades

European equities markets saw substantial declines Friday on the now long-standing concern that losses for banks due to the credit crisis will continue, while markets were also hurt by new unemployment numbers from the US Labor Department.

In London the FTSE 100 was down 2.26 percent to 5,240.7 in its biggest weekly decline since July 2002, while the FTSE 250 dropped 2 percent to 8,966.8.

UK supermarkets led the retail sector lower after Deutsche Bank (FWB: DBK; NYSE: DB) lowered its recommendation on Wm Morrison (LSE: WOS) from “buy” to “hold” and cut its rating on J Sainsbury (LSE: SBRY) from “hold” to “sell”.

Morrison dropped 2.9 percent on the session while Sainsbury was 3.3 percent lower.

Miners were down on declines in commodities prices, led by Kazahmys (LSE: KAZ) with a decline of 8.15 percent while precious metals refiner Johnson Matthey (LSE: JMAT) led losers on the 100 as it dropped 8.51 percent.

Most insurers were down, but Royal & Sun Alliance (LSE: RSA) was the biggest winner on the 100 as it gained 2.91 percent.

Banks and the oil sector were lower, while the real estate sector was mixed.

Elsewhere in the region, the FTSE Eurofirst 300 was down 2.24 percent as the Dax fell 2.42 percent to 6,127.44, the CAC-40 was 2.49 percent lower to 4,196.66 and the IBEX dropped 2.97 percent to 11,139.7.

There was only one winner on the CAC-40 as food processor Danone (Euronext: BN) added 1.13 percent, while the only gainer on the Dax was Altana (FWB: ALT), in the chemicals and pharmaceuticals sector, with a gain of 2.1 percent.

Asia-Pacific region equities markets were lower Friday on continuing concerns about slowdowns in economic growth that were heightened by the new data showing unemployment growing in the United States.

In Tokyo, the Nikkei 225 was down 2.75 percent to 12,212.23 while the Topix index fell 2.56 percent to 1,170.84 and the Mothers market of small and mid-caps dropped 1.34 percent to 424.5 on a report from the Japanese Ministry of Finance that showed business investment in Japan down 7.6 percent in the second quarter of the year.

The banking sector saw the biggest losses as Mitusbishi UFJ (TYO: 8306; NYSE: MTU) was down 5.4 percent, Mizuho Financial (TYO: 8411; NYSE: MFG) was 6.4 percent lower and Resona (TYO: 8308) dropped 7.7 percent.

On the other hand, consumer lender Aiful (TYO: 8515) added 15 percent after JPMorgan Chase (NYSE: JPM; TYO: 8634) raised its recommendation from “underweight” to “neutral”.

Carmakers were lower, led by Mazda (TYO: 7261) with a decline of 6.9 percent, while construction equipment manufacturer Komatsu (TYO: 6301) dropped 4.4 percent.

Elsewhere in the region, declines came as commodities related shares and the financial sector saw declines.

South Korea’s Kospi was down 1.55 percent to 1,404.38 while the Taiex fell 1.64 percent to 6,307.28 and the Straits Times Index dropped 1.97 percent to 2,574.21 in Singapore.

In Australia, the Sydney Ordinaries fell 2.01 percent to 4,949.5 and the S&P/ASX200 was down 2.06 percent to 4,877.1 while in Hong Kong the Hang Seng dropped 2.24 percent to 19,933.28 as it fell below the 20,000 level for the first time since April.

The Sensex was down 2.79 percent to 14,483.83 while the Shanghai Composite dropped 3.29 percent to 2,202.45.

New data from the Labor Department showing that the US lost 84,000 jobs in August, taking the unemployment rate to a five-year high of 6.1 percent, sent Wall Street lower.

The Dow Jones Industrial Average was down 0.06 percent to 11,181.96 in early afternoon trade, while the Nasdaq Composite was 0.37 percent lower to 2,250.6 and the S&P 500 dropped 0.21 percent to 1,234.29.

Some banks were up while UST (NYSE: UST), which makes Skoal and Copenhagen smokeless tobacco products, was 21 percent higher on takeover speculation.

Clothing retailers catering to teens, however, were lower after new data showed that same-store sales across the sector dropped by 2.6 percent last month.

Hot Topic (NAS: HOTT) was down 2.27 percent while Abercrombie & Fitch (NYSE: ANF) was down 4.4 percent on an analyst downgrade from “buy” to “sell”.

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