LII leads 100 lower on downgrades

Global stock exchanges were substantially lower Monday as investors worried about more problems for banks and after US President Barack Obama said that General Motors (NYSE: GM) isn’t doing enough to help themselves to justify more help from the US government.

The FTSE 100 was 3.49 percent lower to 3,762.91 in London, while the FTSE 250 dropped 2 percent to 6,224.28.

Losers on the 100 were led by property investor Liberty International (LSE: LII), which dropped 15.59 percent after downgrades from Goldman Sachs to “sell” and from Charles Stanley to “reduce”.

Banks were led lower by Lloyds Banking Group (LSE: LLOY) with a decline of 14.85 percent, while insurer Aviva (LSE: AV) dropped 14.56 percent.

Over on the 250, oil and gas explorer Melrose Resources (LSE: MRS) added 16.25 percent for the best performance on the index while investment trust BlackRock World Mining Trust (LSE: BRWM) had the worst day on the index with a decline of 10.64 percent.

The biggest gainer on the 100 was in the pharmaceuticals sector, where AstraZeneca (LSE: AZN; NYSE: AZN) added 3.38 percent after positive results from clinical trials for its cholesterol drug Crestor and on more good news relating to an experimental diabetes drug.

The FTSE Eurofirst 300 was down 3.62 percent to 710.79 while the IBEX fell 4.12 percent to 7,601.1 the CAC-40 was 4.27 percent lower to 2,719.23 and the Dax dropped 5.1 percent to 3,989.23.

There were no winners on either the CAC-40 or the Dax, while the biggest losers on both indices were banks as Credit Agricole (Euronext: ACA) fell 13.26 percent and Commerzbank (FWB: CBK) dropped 16.93 percent.

Banks were hurt after it was announced that the Spanish government will bail out regional bank Caja Castilla la Mancha, the first bank that has had to be rescued in Spain since the economic crisis began.

Carmakers were lower on the news that US automaker GM has just 60 days to come up with a reorganization plan that the US government deems sufficient to merit more bailout money.

Renault (Euronext: RNO) fell 10.58 percent while Daimler (FWB: DAI; NYSE: DAI) was down 9.24 percent, Peugeot (Euronext: UG) was 9.16 percent lower and truck manufacturer Man (FWB: EDF1) dropped 8.09 percent.

Asian markets were also lower on the session.

In Tokyo, the Nikkei 225 was down 4.53 percent to 8,236.08 and the Topix index dropped 4.24 percent to 789.54 and the Mothers market fell. 0.51 percent to 308.46.

Uncertainty over how GM’s troubles will affect Japanese carmakers sent the sector lower as Toyota (TYO: 7203; NYSE: TM; LSE: TYT) was 3.7 percent lower, Honda (TYO: 7267; NYSE: HMC) was down 6.7 percent and Mazda (TYO: 7261) dropped 12 percent.

The sector was also hurt by new data from the Japan Automobile Manufacturers Assocation that domestic car production in Japan dropped by 56 percent in February from February 2008, the biggest decline in over 40 years.

The real estate sector was down as well, after yet another property developer filed for bankruptcy.

Elsewhere in the sector, the Shanghai Composite was 0.69 percent lower to 2,358.04 while in Australia the Sydney Ordinaries dropped 1.7 percent to 3,554.2 and the S&P/ASX200 was down 1.85 percent to 3,604.4.

The Kospi fell 3.24 percent to 1,197.46 while the Taiex was down 3.43 percent to 5,206.05, the Straits Times Index was 4.15 percent lower to 1,673.14, the Hang Seng fell 4.7 percent to 13,456.33 and the Sensex dropped 4.78 percent to 9,568.14.

New York equities markets were also much lower in afternoon trade, with the Dow Jones Industrial Average down 3.71 percent to 7,487.53 while the Nasdaq Composite had fallen 3.32 percent to 1,493.96 and the S&P 500 had dropped 3.8 percent to 784.93.

Worries about carmakers and the financial sector that hurt other global markets also hit Wall Street as investors scrambled to lock in profits after last week’s gains in New York markets.

At just before 2 p.m. in New York, General Motors (NYSE: GM) had dropped 21.55 percent while Ford Motor (NYSE: F) was down 4.23 percent.

In the banking sector, JPMorgan Chase (NYSE: JPM) was down 6.86 percent while Citigroup (NYSE: C) was 3.73 percent lower and Bank of America (NYSE: BAC) had dropped 15.94 percent.

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