BGY drops 29 percent on day of big gains

The FTSE 100 had its biggest percentage gain in history Friday as European markets soared on plans to rebuild confidence in the markets by the US and UK governments and others.

Among the measures taken or planned, central banks have pumped new money into financial systems, China abandoned a tax on stock trading and said it will buy shares in three banks, the UK’s Financial Services Authority banned short-selling of financial shares until the end of the year, and the US Securities and Exchange Commission also temporarily banned short-selling of 799 financial stocks and mandated the reporting of short-selling on some stocks not included in the ban.

Short selling consists of selling a financial instrument - a stock or bond, for example - that the seller does not own in hopes of buying it back later at a lower price, essentially betting that the price of the stock or bond will fall.

In London, the FTSE 100 added 8.84 percent to 5,311.3 while the FTSE 250 gained 7.75 percent to 8,982.7.

The previous one-day record gain for the 100 was set October 21, 1987, just a day after the “Black Monday” market collapse, when it added 7.9 percent.

The 100’s gain came on big losses as well as big gains as British Energy (LSE: BGY) led decliners with a drop of 29.88 percent, followed by Imperial Tobacco (LSE: IMT), which fell 28.12 percent on the session.

Telecommunications company BT Group (LSE: BT.A; NYSE: BT) led leaders on the 100 with a gain of 41.6 percent, while among banks the Royal Bank of Scotland (LSE: RBS; NYSE: RBS PRM) jumped 31.95 percent and Barclays Bank (LSE: BARC; NYSE: BCS; TYO: 8642) added 29.24 percent.

The FTSE Eurofirst 300 was up 8.26 percent to 1,151.49 as the Dax added 5.56 percent to 6,189.53, the IBEX was 8.71 percent higher to 11,557.9 and the CAC-40 outdid even the FTSE 100 in terms of percentage gain as the Paris index gained 9.27 percent to 4,324.87.

Banks, insurers and the steel sector were all higher, while the only loser on the CAC-40 was conglomerate Lagardere (Euronext: MMB) with a decline of just 0.15 percent and Volkswagen (FWB: VOW) was one of only three decliners on the Dax as it dropped 13.82 percent.

Equities markets in the Asia-Pacific region soared Friday after big declines earlier in the week.

In Tokyo, the Nikkei 225 was up 3.76 percent to 11,920.86 while the Topix index added 4.69 percent to 1,149.12 and the Mothers market gained 1.71 percent to 447.79.

Among financial groups, Resona Holdings (TYO: 8308) was up 18 percent while Mitsubishi UFJ (TYO: 8306; NYSE: MTU) was 12 percent higher and consumer lender Orix (TYO: 8591) gained 16 percent.

Shippers gained on higher shipping fees, with Nippon Yusen (TYO: 9101) adding 9.9 percent as Mitsui OSK (TYO: 9104) gained 10 percent and Kawasaki Kisen Kaisha (TYO: 9107) jumped 11 percent.

In the steel sector, JFE Holdings (TYO: 5411) was 6.9 percent higher while Nippon Steel (TYO: 5401) gained 6.9 percent.

In Australia, the Sydney Ordinaries added 4.06 percent to 4,840.7 and the S&P/ASX200 was up 4.27 percent to 4,804.1 while South Korea’s Kospi gained 4.55 percent to 1,455.78, India’s Sensex was 5.46 percent higher to 14,042.32, the Straits Times Index was up 5.78 percent to 2,559.07 and the Taiex gained 5.82 percent to 5,970.38.

Meanwhile, the Shanghai Composite added 9.46 percent to 2,075.09 while the Hang Seng gained 9.61 percent to 19,327.73, a jump of 1,695 points on the session.

Banks were among the biggest gainers, led by Australian banks Macquarie (ASX: MQG) with a gain of 38 percent and National Australia Bank (ASX: NAB), which added 17 percent.

South Korea’s Kookmin Bank (KRX: 060000; NYSE: KB) was up 7.1 percent while Bank of China (SEHK: 3988; SSE: 601988), China Construction Bank (SEHK: 0939; SSE: 601939) and the Korea Exchange Bank (KRX: 004940) each gained 10 percent on the session.

Wall Street was also pleased by the initiatives outlined by the US government for bringing back confidence in the markets.

At around 1 p.m. in New York, the Dow Jones Industrial Average was up 3.78 percent to 11,436.07 while the Nasdaq Composite was 3.24 percent higher to 2,270.37 and the S&P 500 had gained 4.17 percent to 1,256.81.

At that point in the day bailed-out insurer American International Group (NYSE: AIG) was up by 45.36 percent for the biggest jump on the Dow as only 5 of the Dow’s constituents were down.

Investment bank Goldman Sachs (NYSE: GS) was up 22.18 percent while Morgan Stanley (NYSE: MS) had added 28.65 percent.

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