The Wall Street Journal-20080216-European Stocks Sag on Banking Concerns

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European Stocks Sag on Banking Concerns

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A WSJ News Roundup

European markets fell sharply Friday amid concerns about earnings in the banking sector and the general outlook for global economic growth. Asian markets were mixed.

"With shell-shocked balance sheets, massive capital injections and virtually no chance of big takeover or merger stories, bank-sector analysts are worrying about the future growth potential of the sector," said Simon Denham, director of Capital Spreads in London.

The pan-European Dow Jones Stoxx 600 Index fell 1.9%, to 317.36. In national markets, Germany's DAX Index dropped 1.9% to 6832.43. In Shanghai, the Composite Index shed 1.2% to 4497.13. Australia's S&P/ASX 200 declined 1.4% to 5606.60, South Korea's Kospi eased 0.2% to 1694.77, New Zealand's NZX 50 index gave up 1.1% to 3510.81 and Taiwan's Weighted index rose 0.1% to 7876.37. India's Sensitive Index jumped up 2% to 18115.25, while Singapore's Straits Times Index rose 1.6% to 3093.04.

In LONDON, the FTSE 100 Index lost 1.6% to 5787.6. Royal Bank of Scotland lost 2.8%, Barclays fell 3.5%, Lloyds TSB dropped 3.8% and HSBC Holdings fell 2.3%.

In PARIS, the CAC-40 Index dropped 1.8% to 4771.79. Natixis was the latest bank to unveil subprime damage, saying it had written down 1.2 billion euros ($1.76 billion) last year because of credit-market difficulties. Natixis shares plummeted 11%, pulling other French banks lower, with Credit Agricole losing 5.3% and Societe Generale falling 2.3%.

In TOKYO, resource stocks such as Nippon Oil and Sumitomo Metal Mining rose sharply, offsetting declines in financials such as Mitsubishi UFJ Financial. The Nikkei Stock Average of 225 companies eased 3.89, or 0.03%, at 13622.56. Nippon Oil gained 3.5% and Sumitomo Metal Mining added 4.3%. Mitsubishi UFJ Financial Group fell 1.7%.

In HONG KONG, the Hang Seng Index rose 0.5% to 24148.43. Bank of East Asia fell 3%, paring its losses after dropping as much as 5.7% early in the day. The shares cut losses after the lender reported a 21% surge in 2007 profits, despite a write-down of 1.15 billion Hong Kong dollars ($147.4 million) on some financial investments.