HBOS, LLOY, RBS decline on bank rescue

European equities markets were higher Monday on more news about bank bailouts.

The US Federal Reserve announced a program in which central banks will offer unlimited funds in dollars to banks, while there were promises in Europe that governments will buy shares in some banks and guarantee bank debt issues.

In London the FTSE 100 was up 8.26 percent to 4,256.9 while the FTSE 250 added 3.72 percent to 7,030.35.

Bucking the trend of gains for banks in Europe, HBOS (LSE: HBOS) along with Lloyds TSB (LSE: LLOY) and the Royal Bank of Scotland (LSE: RBS; NYSE: RBS PRM) declined after they took advantage of a bailout offer from the UK government.

RBS fell 8.37 percent after it fired its CEO and gave majority control to the government in exchange for bailout funds while Lloyds was down 14.47 percent after earlier gains and HBOS dropped 27.54 percent on reduced takeover terms from Lloyds and after it also gave majority control to the government for its bailout.

Barclays Bank (LSE: BARC; NYSE: BCS; TYO: 8642) added 3.73 percent on the announcement that it will try to raise capital privately rather than participating in a government bank bailout.

Miners were up on gains in base metals prices, led by Kazakhmys (LSE: KAZ) with a gain of 22.12 percent, while among travel-related shares TUI Travel (LSE: TT) gained 20.96 percent.

Assets manager Schroders (LSE: SDR.L, SDRt.L) led the 100 as its nonvoting shares were 27.58 percent higher and its voting shares gained 32.35 percent, while house builder Taylor Wimpey (LSE: TW) was the biggest loser on the 250 with a decline of 14.46 percent.

The FTSE Eurofirst 300 was up 9.17 percent to 929.29 while the IBEX added 10.65 percent, the CAC-40 was 11.18 percent higher to 3,531.5 and the Dax gained 11.4 percent to 5,062.45 for the biggest one-day gain in its history, after declining 22 percent last week.

Banks in the region were higher as UBS (SWX: UBSN; NYSE: UBS; TYO: 8657) and Deutsche Bank (FWB: DBK; NYSE: DB) each added 12 percent, Commerzbank (FWB: CBK) was up 14.79 percent, ING (Euronext: INGA; NYSE: ING) was 27 percent higher and Hypo Real Estate Holdings (FWB: HRX) gained 39.95 percent.

There were no losers on the Dax and only one – Societe Generale (Euronext: GLE) with a decline of 2 percent – on the CAC-40, while the biggest gainer on the Paris index was utility GDF Suez (Euronext: GSZ, GSZB), which added 25.01 percent to lead other utilities higher.

The oil sector saw gains on higher crude oil prices, while the steel sector was also up on the session.

Trade in Iceland remained closed for the third consecutive session after bank seizures there last week.

Most equities markets in the Asia-Pacific region saw gains as investors began to gain confidence that efforts by governments to help banks will keep the current credit mess from deepening.

New initiatives to help banks helped as they were announced in Australia, New Zealand, Indonesia and Hong Kong, and included guarantees on bank deposits to using foreign reserves to help stabilize the markets.

Taiwan was the exception on the session, as the Taiex dropped 2.15 percent to 5,020.44 after being closed for a holiday on Friday as a ban on the short-selling of shares, due to expire tomorrow, was extended by regulators to the end of the year.

Banks led the gains elsewhere, with the Commonwealth Bank of Australia (ASX: CBA) up 6.7 percent as the Bank of East Asia (SEHK: 0023) added 7.4 percent, National Australia Bank (ASX: NAB) was 7.6 percent higher, Industrial & Commercial Bank of China (SEHK: 1398; SSE: 601398) was up 14 percent in Hong Kong, and ICICI Bank (BSE: ICICIBC) gained 19 percent in India.

Gains in copper prices in London sent miners higher as well.

The Jakarta Composite added 0.7 percent on the session after a three-day closure due to steep declines there.

Elsewhere, gains were higher as the Shanghai Composite was up 3.65 percent to 2,073.57 and the Kospi added 3.79 percent to 1,288.53.

In Australia, the Sydney Ordinaries gained 5.14 percent to 4,141.9 and the S&P/ASX200 was up 5.55 percent to 4,180.7, while in Singapore the Straits Times Index was 6.57 percent higher to 2,076.35, India’s Sensex added 7.42 percent to 11,309.09 and in Hong Kong the Hang Seng jumped 10.24 percent to 16,312.16 as it gained over 1,500 points on the session.

Tokyo markets were closed for the celebration of Health and Sports Day.

New York equities markets also saw big gains in early afternoon trade with the Dow Jones Industrial Average up 7 percent to 9,043.05 while the Nasdaq Composite added 7.69 percent to 1,776.33 and the S&P 500 gained 7.29 percent to 964.75.

Banks were higher, with Merrill Lynch (NYSE: MER) adding 4.5 percent as Bank of America (NYSE: BAC) was up 6.28 percent, Citigroup (NSYE: C) was 9.64 percent higher and Goldman Sachs gained 17.51 percent in early afternoon trade.

Morgan Stanley (NYSE: MS) jumped 64.15 percent on a deal with Mitsubishi UFJ (TYO: 8306; NYSE: MTU) which gives the Japanese bank 21 percent ownership of Morgan Stanley.

Carmakers also saw gains as Ford (NYSE: F) added 23.12 percent and General Motors (NYSE: GM) gained 29.45 percent.

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