RBS, HSBC, BARC all down in London

Equities markets in Europe saw significant declines Wednesday as the banking sector declined both in London and on the continent.

The FTSE 200 was down 4.97 percent to 4,180.64 in London, while the FTSE 250 dropped 2.81 percent to 6,363.59.

The London banking sector was down after Morgan Stanley said that HSBC’s (LSE: HSBA; NYSE: HBC; Euronext: HSBC; SEHK: 005) earnings will fall in 2009 and on an announcement from Barclays Bank (LSE: BARC; NYSE: BCS; TYO: 8642) that it will cut 2,100 additional jobs on the heels of Tuesday’s announcement of the elimination of 2,500 jobs.

HSBC dropped 8.01 percent and Barclay’s was down 14.35 percent, but the biggest loser in the sector and on the 100 was Royal Bank of Scotland (LSE: RBS; NYSE: RBS PRM), which fell 18.4 percent on the session.

The biggest losers on the 250, meanwhile, came from pubs operators as Enterprise Inns (LSE: ETI) was 23.27 percent lower and Punch Taverns (LSE: PUB) dropped 31.17 percent.

There were losses in the mining sector and for big oil as commodities prices fell, but oil and gas explorer Venture Production added 22.75 percent to lead the 250’s gainers, while in the engineering sector AMEC (LSE: AMEC) had the best day on the 100 as it added 6.42 percent.

Elsewhere in the region, the FTSE Eurofirst 300 was down 4.31 percent to 804.17 while the IBEX fell 4.03 percent to 8,692.7, the CAC-40 dropped 4.56 percent to 3,052 and the Dax was 4.63 percent lower to 4,422.35.

There was only one winner each on the CAC-40 and the Dax as drug maker Sanofi-Aventis (Euronext: SAN; NYSE: SNY) added 2.03 percent and chemicals group Altana (FWB: ALT; NYSE: AAA) gained 2.06 percent.

As in London, banks saw declines.

Societe Generale (Euronext: GLE) was down 10.94 percent for the worst performance on the CAC-40, while Commerzbank (FWB: CBK) fell 10.66 percent, Deutsche Bank (FWB: DBK; NYSE: DB) was 9 percent lower and Credit Agricole (Euronext: ACA) dropped 7.52 percent.

German conglomerate Siemens (FWB: SIE; NYSE: SI) put in the worst performance on the Dax with a decline of 12.04 percent.

Most Asia-Pacific equities markets, on the other hand, saw gains on the session.

Reacting to Tuesday’s gains in crude oil prices, oil companies saw gains as Cnooc (SEHK: 0883; NYSE: CEO) was up 3.1 percent in Hong Kong while Japan Petroleum Exploration (TYO: 1662) added 3.2 percent and Inpex (TYO: 1605) gained 5.3 percent.

In Tokyo, the Nikkei 225 was up 0.29 percent to 8,438.45 while the Topix index gained 0.65 percent to 819.39 and the Mothers market of small and mid-caps added 1.75 percent to 335.33.

Shippers saw gains on higher fees, with Nippon Yusen (TYO: 9101) up 1.5 percent while Kawasaki Kisen Kaisha (TYO: 9107) was 2.8 percent higher and Mitsui OSK Lines (TYO: 9104) gained 3.6 percent.

The Japanese real estate sector saw more declines, with Mitsui Fudosan (TYO: 8801; NAS: MDSFF) down 3.2 percent while Mitsubishi Estate (TYO: 8802) dropped 3.3 percent.

The Straits Times Index was up 0.16 percent to 1,764.72 and the Hang Seng added 0.27 percent to 13,704.61, while in Australia the Sydney Ordinaries gained 0.85 percent to 3,624.3 and the S&P/ASX200 was 0.89 percent higher to 3,687.

South Korea’s Kospi added 1.28 percent to 1,182.68, the Sensex was up 3.3 percent to 9,370.49 and the Shanghai Composite gained 3.52 percent to 1,928.87, but Taiwan’s Taiex dropped 0.24 percent to 4,521.47.

In afternoon trade in New York the Dow Jones Industrial Average was down 3.04 percent to 8,192.1 while the Nasdaq Composite had dropped 3.2 percent to 1,497 and the S&P 500 was 3.43 percent lower to 841.9.

The declines came after the Commerce Department reported that retail sales in the US fell 3.7 percent in December, more than double the anticipated decline.

Economic woes which led to falling sales during the holiday period contributed to the announced filing during the day of Chapter 11 bankruptcy protection by Fresno, California-based Gottschalks.

The regional chain, which operates 59 department stores and 3 Village East clothing stores in 6 western states and has been in business for over a century, has arranged $125 million in financing that will let it operate during reorganization and an attempt to sell the business if the bankruptcy court approves the deal.

The filing by Gottschalks follows similar filings by several national and regional retail chains, and comes a few months after the chain was ousted from trade on the New York Stock Exchange due to ongoing financial problems.

The banking sector was also lower.

Citigroup (NYSE: C) was down 23.05 in afternoon trade a day after announcing that it would hand over control of Smith Barney to Morgan Stanley (NYSE: MS), which was down 8.22 percent.

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