Asia-Pacific markets decline after UBS takes writedowns

Most equities markets in the Asia-Pacific region saw declines on Monday after Swiss bank UBS (SWX: USBN; NYSE: UBS; TYO: 8657) took $10 billion in writedowns, renewing concerns that losses from the US subprime mortgage crisis have not yet seen their peak. The major exception among losses in the region’s markets was the Shanghai Composite, which added 1.38 percent to 5,161.92. Otherwise, Singapore’s Straits Times index was 0.14 percent lower to 3,553,08 while in India, Sensex fell 0.18 percent to 19,930.68. The Sydney Ordinaries dropped 0.42 percent to 6,686.1 and the S&P/ASX200 was down 0.44 percent to 6,625.1 in Australia. In Hong Kong, the Hang Seng was 1.18 percent lower to 28,501.1 while Taiwan’s Taiex fell 1.43 percent to 8,598.03 and the Kospi index dropped 1.44 percent to 1,906.42 in South Korea.

Tokyo’s markets were also lower. The Nikkei 225 was down 0.2 percent to 15,924.39 while the Topix index was 0.21 percent lower to 1,558.51 and the Mothers market fell 1.21 percent to 874.48. The declines there came after a new report on US employment caused concern that the Federal Reserve might not cut interest rates as expected when it meets later this week. Declines were limited, however, after machinery orders in Japan were reported up by 12.7 percent in October, twice the gain that was anticipated. Banks saw gains, with Sumitomo Mitsui (TYO: 8316) adding 0.5 percent to ¥954,000 and Mitsubishi UFJ gaining 1.6 percent to ¥1,220. Chipmaking equipment maker Tokyo Electron (TYO: 8035) added 1.2 percent to ¥6,990 but Nikon (TYO: 7731), which makes lithography equipment for semiconductor production, was down 1.8 percent to ¥3,870. Matsushita Electric Industrial (TYO: 6572; NYSE: MC) was down 1.9 percent to ¥2,325. The oil sector saw declines after crude oil prices fell late last week. Japan Petroleum (TYO: 1662) fell 2 percent to ¥8,440 while Inpex (TYO: 1605) dropped 3.3 percent to ¥1.16 million.

European markets saw gains. The FTSE Eurofirst 300 added 0.6 percent to 1,547.8. In Madrid, the IBEX gained 0.08 percent to 15,832.7. Frankfurt’s Dax was up 0.49 percent to 8,033.36 while the Paris CAC-40 was 0.56 percent higher to 5,750.92. Banks were higher on the session. Credit Agricole (Euronext: ACA) added 1.58 percent to €24.48 while Commerzbank (FWB: CBK) was up 2.07 percent to €28.07 and Dexia (Euronext: DEXB) was 3.05 percent higher to €18.27. Carmakers also saw gains. BMW (FWB: BMW) gained 2.16 percent to €34.77. Renault (Euronext: RNO) added 4.67 percent to €103.63 after it said it will buy a 25 percent stake in Russian carmaker AvtoVAZ while Peugeot (Euronext: UG; OTC: PEUGY) jumped 5.01 percent to €56.41 on a broker upgrade. Construction materials group Lafarge (Euronext: LG; :NYSE: LR) was the best performer on the CAC-40 with a gain of 13.08 percent to €121.75. Utilities declined. Gas and electricity utility EDF (Euronext: EEN) fell 0.24 percent to €24.90 while RWE (FWB: RWE) was down 0.73 percent to €97.17, Gaz de France (Euronext: GAZ) was 0.82 percent lower to €39.95 and Suez (Euronext: SZE; NYSE: SZE) dropped 1.41 percent to €46.03. Industrial gas group Linde (FWB: LIN) was the biggest loser on the Dax, with a decline of 2.37 percent to €89.31, while Air Liquide (Euronext: AI) was down 1.3 percent to €99.76. In the oil sector, Total (Euronext: FP; NYSE: TOT) dropped 0.41 percent to €56.16.

Markets were mixed in London, however, with the FTSE 100 up 0.16 percent to 6,565.4 but the FTSE 250 falling 2.6 percent to 10,630.3. House builders were higher on the 100. Taylor Wimpey (LSE: TW) added 4.2 percent to 223.5p, while Persimmon (LSE: PSN) gained 4.6 percent to 830.5p. Construction materials group Wolseley (LSE: WOS) was up 4.29 percent to 765p. Over on the 250, meanwhile, construction group Alfred McAlpine (LSE: MCA) was the best performer of the day with a gain of 6.92 percent to 525p. Directories publisher Yell Group (LSE: YELL) had the best day on the 100, where it added 5.93 percent to 419.75p. In the retail sector, do-it-yourself retailer Kingfisher (LSE: KFG) gained 3.77 percent to 156.2 after ING initiated coverage with a “buy” recommendation, while GAME Group (LSE: EBQ) jumped 6.13 percent to 242.5p on the 250. Pubs operators saw declines. Punch Taverns (LSE: PUB) fell 1.49 percent to 827p while Mitchells & Butlers (LSE: MAB) was down 1.63 percent to 499.25p. In the oil sector, Royal Dutch Shell’s (LSE: RDSA, RDSB; NYSE: RDS.A, RDS.B) A shares were 1.39 percent lower to £19.91 while Dana Petroleum (LSE: DNX) fell 8.79 percent to €13.39. Lifting equipment manufacturer FKI (LSE: FKI) was the biggest loser on the 250, where it dropped 16.72 percent to 64.75p.

In New York, the markets were higher in late afternoon trade ahead of the Federal Reserve’s decision on interest rates, due Tuesday, and on data showing that pending home sales were up in October. The Dow Jones Industrial Average was 0.56 percent higher to 13,701.35 while the Nasdaq Composite had gained 0.29 percent to 2,713.89 and the S&P 500 was up 0.49 percent to 1,512.09. The gain in pending home sales was welcome news after the news of more writedowns due to exposure to the US subprime crisis by UBS. Construction equipment manufacturer Caterpillar (NYSE: CAT) added $2.56 to $76.75 on positive broker comment. Private equity firm Blacksone Group (NYSE: BX) was up $1.42 to $23.34 on rumors that it could be thinking of bidding on miner Rio Tinto (NYSE: RTP; LSE: RIO; ASX: RIO), which was $7.48 higher to $475.48. In the fast food sector, McDonald’s (NYSE: MCD) gained $1.60 to $61.76 after it reported that same-store sales were up by 8.2 percent in November.