BDEV, PSN decline on drop in UK house prices

Equities markets in Europe saw significant declines Tuesday as investors were disappointed that the announcement of a new US government plan to rescue the financial sector there did not contain more details.

The FTSE 100 was down 2.19 percent to 4,213.08 in London, while the FTSE 250 dropped 2.46 percent to 6,495.66.

Home builders were lower after the Royal Institution of Chartered Surveyors said UK house prices dropped in December from November, with Persimmon (LSE: PSN) falling 8.1 percent while Barratt Developments (LSE: BDEV) was down 9.2 percent on the session.

Most retailers were lower, led by DSG International (LSE: DSGI) with a decline of 7.84 percent.

Although UK retail sales were up in January, according to the British Retail Consortium, there are concerns that the growth was an anomaly related to deep discounts offered by many retailers during the month.

Banks were lower, with Lloyds Banking Group (LSE: LLOY) leading the way with a decline of 5.57 percent, as investors worried that the US plan to help its financial sector would not be enough to shore up the economy as a whole.

Worries about efforts to rescue the US economy were also behind declines in the mining sector as Ferrexpo (LSE: FXPO) dropped 14.29 percent on the 250 while Xstrata (LSE: XTA) was down 8.81 percent and Kazakhmys (LSE: KAZ) was 9.49 percent lower as the worst performer of the day on the 100.

Consumer finance group Cattles (LSE: CTT) once again led gainers on the 100 as it added 9.38 percent on the session.

The FTSE Eurofirst 300 fell 2.38 percent to 810.34 while the IBEX was down 2.18 percent to 8,397.3, the Dax was 3.46 percent lower to 4,505.54 and the CAC-40 dropped 3.65 percent to 3,020.75.

There were only 2 gainers on the Dax and none at all on the CAC-40, while aerospace and defense contractor EADS (Euronext: EAD; FWB: EAD) turned in the worst performance of the session on the CAC-40 as it fell 7.62 percent and chipmaker Infineon (FWB: IFX; NYSE: IFX) led losers on the Dax with a decline of 7.06 percent.

Asia-Pacific region markets were mixed on the session.

In Tokyo, the Nikkei 225 was down 0.29 percent to 7,945.94 and the Topix index was 0.1 percent lower to 778.1 but the Mothers market of small and mid-caps added 0.29 percent to 320.51.

Exporters were mostly lower after the yen strengthened and on uncertainties surrounding the US plan to bail out banks.

Among carmakers, Honda (TYO: 7267; NYSE: HMC) was down 0.4 percent and Toyota (TYO: 7203; NYSE: TM; LSE: TYT) dropped 1.6 percent, but Nissan added 7.3 percent after it announced a radical plant to survive the recession, including the elimination of 20,000 jobs and the reduction of inventories by 20 percent by March.

Trade in Tokyo was light ahead of a market closure Wednesday in recognition of National Foundation Day.

India’s Sensex was up 0.66 percent to 9,647.47 while the Taiex added 0.7 percent to 4,526.1, the Hang Seng was 0.81 percent higher to 13,880.64, the Straits Times Index advanced by 1.25 percent to 1,703.29 and the Shanghai Composite gained 1.82 percent to 2,265.16.

In South Korea, however, the Kospi was down 0.32 percent to 1,198.87 while in Australia the Sydney Ordinaries fell 0.5 percent to 3,428.6 and the S&P/ASX200 dropped 0.57 percent to 3,488.7.

Banks and insurers were lower on Wall Street after the announcement of the US government plan to rescue the US financial sector.

The Dow Jones Industrial Average was down 4 percent to 7,940.41 in afternoon trade in New York while the Nasdaq Composite was 3.46 percent lower to 1,536.5 and the S&P 500 had dropped 4.18 percent to 833.52.

Regional banks took big losses, with many down by 22 percent to 25 percent, but major banks also declined substantially.

Citigroup (NYSE: C) was 12.66 percent lower while Bank of America (NYSE: BAC) dropped 16.98 percent.

Even banks that are considered to be in better shape were lower in afternoon trade.

Wells Fargo (NYSE: WFC) had dropped 12.59 percent by just past 2 p.m.

Among insurers, American International Group (NYSE: AIG) had fallen 5.68 percent while Prudential (NYSE: PUK) was down 8.09 percent.

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