OMX Iceland 15 drops 77 percent as trade resumes

Major equities markets were higher in Europe Tuesday, but exchanges in Belgium, the Netherlands and Iceland were lower on the session.

Iceland’s OMX Iceland 15 was down 77.42 percent and the OMX Iceland All-Share dropped 66.83 percent as trade resumed after a three-day halt last week as the banking system collapsed and the government took over several banks.

Meanwhile, the BEL20 in Belgium and the AEX in the Netherlands were down 4.77 percent and 0.27 percent respectively after financial services group Fortis (EuronextAMS: FOR A; EuronextBRU: FORB; LuxSE: FOR) dropped 78 percent on the session as shares resumed trading after a recent bailout.

Things were better elsewhere as the FTSE 100 added 3.23 percent to 4,394.21 and the FTSE 250 gained 0.91 percent to 7,094.45 in London.

Banks were mixed as Standard Chartered (LSE: STAN; SEHK: 2888) added 10.5 percent and Barclays Bank (LSE: BARC; NYSE: BCS; TYO: 8642) gained 14.29 percent, but recently rescued Royal Bank of Scotland (LSE: RBS; NYSE: PRM) fell 1.07 percent, HBOS (LSE: HBOS) was 5.22 percent lower and Lloyds TSB (LSE: LLOY) dropped 6.6 percent.

Water utilities saw gains as Deutsche Bank upped its recommendation on United Utilities (LSE: UU) from “hold” to buy” and also upgraded other water companies.

United Utilities added 7.54 percent while Severn Trent (LSE: SVT) was up 6.75 percent, Northumbrian Water Group (LSE: NWG) was 5.79 percent higher and Pennon Group (LSE: PNN) gained 5.01 percent.

The Eurofirst 300 was up 3.06 percent to 966.12 as the CAC-40 added 2.75 percent to 3,628.52 and the Dax and the IBEX each gained 2.7 percent, to 5,199.19 and 10,224.5 respectively.

Banks were mixed, with Deutsche Bank (FWB: DBK; NSYE: DB) leading the Dax with a gain of 10.71 percent but Dexia (Euronext: DX; EuronextBRU: DEXB), the leading lender to local governments, topping losers on the CAC-40 as it dropped 15.2 percent on rumors, denied by Dexia officials, that it could be nationalized by Belgium.

Insurers saw gains, while the steel sector was mixed and chipmakers were lower on the session.

Most Asia/Pacific region equities markets saw gain on the session, with the main exception being the Shanghai Composite, which dropped 2.71 percent to 2,017.32.

In Tokyo, the Nikkei 225 and the Topix index both had their best one-day performances in history after a holiday closure on Monday, with the Nikkei adding 14.15 percent to 9,447.57 and the Topix gaining 13.73 percent to 956.3 on investory confidence after governments in Europe and the United States made plans to buy into banks to help them weather the current financial crisis.

With the Mothers market of small and mid-caps also up 12.64 percent to 303.45, Japanese markets were also helped by a Bank of Japan announcement of various initiatives geared toward helping markets there.

Among the plans announced by the Bank of Japan were a postponement in cutting interest rates, an improvement of its dollar-fund supply operations, a broadening of the types of collateral it accepts in market operations, a possible expansion of disclosure rules on short-selling and the potential to put public funds into regional banks.

Banks were higher, as Mitsubishi UFJ (TYO: 8306; NYSE: MTU) added 14.08 percent, Mizuho Financial (TYO: 8411; NYSE: MFG) was up 15.15 percent and Sumitomo Mitsui (TYO: 8316) gained 16.85 percent.

Carmakers and the electronics sector also saw gains as an easing of financial sector problems raised hopes of more export sales.

Elsewhere in the region, India’s Sensex was up 1.54 percent to 11,483.4 while the Straits Times Index added 2.5 percent to 2,128.31 and the Hang Seng jumped 3.19 percent to 16,832.88.

In Australia the S&P/ASX200 was 3.7 percent higher to 4,335.2 while the Sydney Ordinaries gained 4.09 percent to 4,311.5.

Australia’s financial sector was helped after the government there announced an economic stimulus package, with National Australia Bank (ASX: NAB) adding 7.3 percent while assets manager Babcock & Brown (ASX: BNB) saw its shares soar by 39 percent.

Iron ore producer Fortescue Metals Group (ASX: FMG) added 55 percent and miner Rio Tinto (ASX: RIO; LSE: RIO; NYSE: RTP) was up 4.3 percent on gains in raw materials prices.

Taiwan’s Taiex was 5.4 percent higher to 5,291.56 while South Korea’s Kospi gained 6.14 percent to 1,367.69.

Wall Street saw declines in afternoon trade after an early rally as investors worried that profits could be cut by a slowdown in the global economy.

In mid-afternoon trade the Dow Jones Industrial Average had dropped 1.89 percent to 9,209.76 while the Nasdaq Composite had fallen 3.33 percent to 1,782.9 and the S&P 500 was 1.46 percent lower to 988.72.

The profits worries were illustrated by PepsiCo’s (NYSE: PEP) announcement that it will cut 3,300 jobs after its profits were down 9.5 percent in the third quarter as consumers slowed their purchases of soft drinks and snack foods.

Shares in PepsiCo fell 12.74 percent while soft-drink rival Coca-Cola (NYSE: KO) was also lower as it dropped 8.34 percent in afternoon trade.

Microsoft (NAS: MSFT) was down 5.29 percent and chipmaker Intel (NAS: INTC) had dropped 5.24 percent in afternoon trade on declining demand for computers and reduced earnings estimates.

Story link: OMX Iceland 15 drops 77 percent as trade resumes