ETI drops over 11 percent, may leave 100

European equities markets were lower Wednesday after the European Commission forecast that the Eurozone economy will grow by only 1.3 percent this year, down from an earlier prediction of 1.7 percent growth and a separate report from the National Institute for Economic and Social Research said that the UK economy will see its first contraction this year in at least ten years.

In London, the FTSE 100 was 0.91 percent lower to 5,366.2 while the FTSE 250 dropped 1.87 percent to 8,967.2.

Enterprise Inns (LSE: ETI) dropped 11.6 percent on a broker downgrade and news reports that the pubs operator will be put off the FTSE 100, while Punch Taverns (LSE: PUB) declined even more on the 250, falling 12.37 percent on the session.

Banks and most miners were lower, while most in the real estate sector saw gains.

The FTSE Eurofirst 300 was down 0.69 percent to 1,147.67 while the CAC-40 fell 0.23 percent to 4,283.66, the Dax was 0.37 percent lower to 6,210.32 and the IBEX dropped 1.49 percent to 11,180.8.

Banks were lower, led down in Paris by Credit Agricole (Euronext: ACA) with a decline of 4.75 percent, after Lehman Brothers (NYSE: LEH) reported $5.6 billion in writedowns in the third quarter, much more than the expected $2.2 billion in losses.

Utilities and insurers were also lower, but the pharmaceuticals sector was up, led by Sanofi-Aventis (Euronext: SAN; NYSE: SNY) with a gain of 7.15 percent on the CAC-40.

Most equities markets in the Asia-Pacific region were also lower, with shippers and commodities producers again leading the way after metals prices on the London Metal Exchange dropped again Tuesday.

Tokyo’s markets were mixed as the Nikkei 225 dropped 0.44 percent to 12,346.63 but the Topix index added 0.07 percent to 1,192.38 and the Mothers market of small and mid-caps gained 1.84 percent to 437.88.

Banks saw gains, with Mitsubishi UFJ (TYO: 8306; NYSE: MTU) up 3.2 percent while Resona (TYO: 8308) jumped 6 percent after early declines and broker Nomura (TYO: 8604; NYSE: NMR; SGX: N33) gained 3.2 percent.

Shippers, traders, and metals groups were lower on falling shipping rates and on metals demand worries, while glassmakers were also lower on the session.

Elsewhere in the region the Shanghai Composite added 0.23 percent to 2,150.76 while Taiwan’s Taiex was up 0.52 percent to 6,458.01 and South Korea’s Kospi gained 0.72 percent to 1,464.98.

On the other hand, Australia’s S&P/ASX200 was down 1.5 percent to 4,905.5 and the Sydney Ordinaries fell 1.6 percent to 4,961.4, mostly on the declines in metals prices, while India’s Sensex was also 1.6 percent lower, to 14,662.61, the Straits Times Index fell 1.9 percent to 2,662.41 and the Hang Seng dropped 2.4 percent to 19,999.78 in Hong Kong.

Wall Street saw gains in early afternoon trade as the Dow Jones Industrial Average added 0.78 percent to 11,317.77, the Nasdaq Composite was up 0.87 percent to 2,228.97 and the S&P 500 gained 0.71 to 1,233.16.

The gains came on the announcement by Lehman Brothers of plans to sell most of its investment management business and spin off its real estate investment, even though some analysts were not convinced that the moves will solve either Lehman’s problems or wider credit-market issues.

Despite the news from Lehman, banks were lower in afternoon trade, while computer maker IBM (NYSE: IBM) added 3.61 percent to lead the Dow.

Story link: ETI drops over 11 percent, may leave 100