LLOY gains on upgrade

Banks were in focus again Wednesday as European equities markets were significantly higher on the session.

The FTSE 100 added 2.4 percent to 4,295.2 and the FTSE 250 jumped 2.64 percent to 6,423.76 in London, while elsewhere in the sector the FTSE Eurofirst 300 was up 3.15 percent to 810.38, the CAC-40 was 4.11 percent higher to 3,076.01 in Paris, the IBEX added 4.22 percent to 8,701.5 in Madrid and the Dax gained 4.52 percent to 4,518.72 in Frankfurt.

Banks were up on an upgrade for Lloyds Bank Holdings (LSE: LLOY) from Citibank (NYSE: C) and on an announcement from US bank Wells Fargo (NYSE: WFC) that it does not need anymore government bailout money and that it will maintain its dividend.

Lloyds had the best day on the 100 in London as it added 50.37 percent, followed by a 35.67 percent gain for Royal Bank of Scotland (LSE: RBS; NYSE: RBS PRM) and as Barclays Bank (LSE: BARC; NYSE: BCS; TYO: 8642) was up 18.89 percent.

Insurers rounded out the top five winners on the 100 as life insurer Prudential (LSE: PRU; NYSE: PUK) added 13.68 percent and Aviva (LSE: AV) gained 13.55 percent.

The biggest loser on the 100 was in the mining sector, as Xstrata (LSE: XTA) dropped 9.05 percent even as most of the sector saw gains.

Banks were the biggest winners on both the Dax and the CAC-40 as well, as Deutsche Bank (FWB: DBK; NYSE: DB) added 21.97 percent in Frankfurt and BNP Paribas (Euronext: BNP; TYO: 8665) gained 20.77 percent in Paris.

Insurers also saw gains on both indexes, with Axa (Euronext: CS; NYSE: AXA) up 10.42 percent in Paris as Allianz (FWB: ALV; NYSE: AZ) added 9.53 percent in Frankfurt.

There were no losers on the Dax and only three on the CAC-40, led by drug maker Sanofi-Aventis (Euronext: SAN; NYSE: SNY), which dropped 3.09 percent on the session.

Most equities markets in the Asia-Pacific region were also higher as markets in Hong Kong, China and Taiwan remained closed in observance of the Lunar New Year.

In Tokyo, the Topix index was down 0.14 percent to 804.33 but the Nikkei 225 added 0.56 percent to 8,106.29 and the Mothers market added 2.19 percent to 337.85.

Shares related to the semiconductors sector saw gains after German chipmaker Qimonda (OTC: QMNDQ) filed for bankruptcy, raising hopes that the glut of chips on the market might decline.

Advantest (TYO: 6857; NYSE: ATE) added 5 percent while Tokyo Electron (TYO: 8035) was up 7.9 percent and Elpida Memory (TYO: 6665) gained 9.1 percent.

Australia’s markets saw gains as the Sydney Ordinaries added 1.26 percent to 3,435.1 and the S&P/ASX200 was up 1.5 percent to 3,495.1, while in India the Sensex was 2.81 percent higher to 9.257.47, the Straits Times Index added 4.8 percent to 1,766.08 and the Kospi gained 5.91 percent to 1,157.98 in South Korea.

Wall Street was higher in early afternoon trade in New York.

The Dow Jones Industrial Average was up 1.6 percent to 8,305.44 while the Nasdaq Composite had added 3.06 percent to 1,551.01 and the S&P 500 was 2.56 percent higher to 867.32.

The gains came on reports that the Obama administration has plans to create an apparatus to buy up bad bank assets in order to remove them from the banks’ ledgers and improve their economic health.

Wells Fargo (NYSE: WFC) was up 23.66 percent after it made its statements regarding government bailouts and its dividend, while Citigroup added 16.43 percent and Bank of America gained 14 percent in early afternoon trade.

Aerospace giant Boeing (NYSE: BA) was up 0.46 percent in early afternoon trade even though it reported a $56 million loss in the fourth quarter, predicted that earnings will fall short of expectations in 2009, and said it will cut 10,000 jobs this year.

The airplane maker’s fourth quarter losses were largely due to a two-month strike by machinists late last year.

Story link: LLOY gains on upgrade