Insurer Aviva drops 33 percent on session

European equities markets were significantly lower Thursday after the European Central Bank forecast economic contraction in the Eurozone this year and perhaps next year as well, and on interest rate cuts from both the ECB and the Bank of England.

Both central banks cut rates by half a percentage point, to 1.5 percent in the Eurozone and to 0.5 percent in the UK.

In London, the FTSE 200 was down 3.18 percent to 3,529.86 while the FTSE 250 dropped 2.44 percent to 5,935.37.

The five biggest losers on the 100 were all in either the insurance or banking sectors, led by insurer Aviva (LSE: AV), which dropped 33.37 percent, followed by Legal and General (LSE: LGEN) with a decline of 28.88 percent while Prudential (LSE: PRU; NYSE: PUK) was down 20 percent on the session.

Among banks, Barclays Bank (LSE: BARC; NYSE: BCS; TYO: 8642) was 24.1 percent lower while Lloyds Banking Group dropped 15.51 percent.

Among property developers, British Land (LSE: BLND) added 4.77 percent and Hammerson (LSE: HMSO) was up 4.44 percent for the two best performances of the session on the 100, but over on the 250 Barratt Developments (LSE: BDEV) dropped 11.8 percent.

Also on the 250, investment trust Candover Investments (LSE: CDI) dropped 41.84 percent in the worst performance of the session on that index, while consumer lender Cattles (LSE: CTT) dropped another 12.67 percent.

The FTSE Eurofirst 300 was down 3.66 percent to 670.72 while the CAC-40 fell 3.96 percent to 3,695.49, the IBEX was 4.51 percent lower to 7,025.9 and the Dax dropped 5.02 percent to 3,695.49.

Insurers were lower on the Dax and the CAC-40 as well, with Axa (Euronext: CS; NYSE: AXA) down 9.04 percent in Paris while Allianz (FWB: ALV; NYSE: AZ) dropped 9.89 percent in Frankfurt.

There were only two winners on the CAC-40 while the worst performance of the day on that index came from tire maker Michelin (Euronext: ML) with a decline of 9.41 percent.

Over on the Dax, only Volkswagen (FWB: VOW) gained and then only by 0.09 percent, while in the steel sector Salzgitter (FWB: SZG) dropped 16.06 for the worst day on that index.

Markets were mixed in the Asia-Pacific region.

In Tokyo, the Nikkei 225 added 1.95 percent to 7,433.49 while the Topix index added 1.3 percent to 741.55 but the Mothers market of small and mid-caps was 0.57 percent lower to 291.22.

Shippers were higher at least partly on hopes that China’s spending on infrastructure and manufacturing to stimulate the economy will bring them more business.

Kawasaki Kisen (TYO: 9107) was up 4.1 percent, Nippon Yusen (TYO: 9101) added 4.9 percent and Mitsui OSK Lines (TYO: 9104) gained 7 percent.

A weaker yen, meanwhile, helped exporters.

Other gainers on the session included a gain of 0.7 percent to 3,188.5 for the Sydney Ordinaries as the S&P/ASX200 added 0.73 percent to 3,148.8 in Australia, while the Shanghai Composite was up 1.04 percent to 2,221.08 and the Taiex was 2.11 percent higher to 4,637.2.

On the other hand, South Korea’s Kospi was down 0.1 percent to 1,058.18 while the Hang Seng fell 0.97 percent to 12,211.24, the Straits Times Index was 1.66 percent lower to 1,518.64 and the Sensex dropped 2.94 percent to 8,197.92.

At just past 2 p.m. in New York, the Dow Jones Industrial Average was down 3.63 percent to 6,626.38 while the Nasdaq Composite fell 3.21 percent to 1,310.26 while the S&P 500 had dropped 3.89 percent to 685.15.

Markets were down after auditors at General Motors (NYSE: GM) warned that the carmaker could be forced to file Chapter 7 bankruptcy and liquidate its holdings if it does not get more government loans and cannot negotiate terms with lenders which would invalidate current loan terms allowing lenders to demand immediate repayment if auditors say they are doubtful about the company’s ability to continue operation.

GM was down 17.73 percent in afternoon trade.

In the banking sector, shares of Citigroup fell below $1 for the first time at one point in the session, taking the bank’s market value below $6 billion on waning investor confidence.

Citigroup (NYSE: C) was down 11.06 percent in the afternoon session.

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