10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – European banks fell after German regulators ordered a small bank to close its operations and IMF raised its estimate of subprime loan losses.

Global Markets Update

European markets edged lower on persistent worries related to credit markets, rising euro ahead of rate decision on tomorrow from ECB and BoE and worries related to earnings.

Weserbank in Germany, small lender was ordered to close after bank’s investment in floating rate securities declined. The cooperative bank has been in operation for 96 years and its recent business of funding and listing companies for initial public offering has not been profitable.

Realty, banks, and financial services stocks fell after the IMF report projected sharply higher losses related to risky loans in the U.S. Commerzbank, Deutsche Bank and Dresdner Bank fell between 1% and 3%.

Escada AG, luxury retailer fell 10% after local news report suggested that leveraged buyout firm Apax Partners will not invest in the company.

However, wind turbine maker Nordex AG rose 4% after it reported 2007 earnings surged to 48 million euros from 12.6 million euros a year ago on 45% rise in sales. Earnings per share increased to 74 euro cents. Sales increased to 747 euros and order book increased to 2.9 billion at the end of the year.


U.S. stocks edged lower on negative news on earnings and rising crude oil and metal prices. Crude oil traded above $112 a barrel after weekly inventories report showed higher than expected decline. UPS lowered its earnings estimate on higher oil price and softer domestic shipment volumes. AMR cancelled 500 flights after several planes were grounded for inspections. Goldman Sachs reported a rise in level-3 assets which are hard to value and reported 35% decline in revenue.

UK manufacturing index rose in the first quarter but consumer confidence in March fell. The International Monetary Fund lowered the growth estimate for UK to 1.6% from 1.8% for the current year. ONS reported first quarter total output rose 0.4% on the rise of 0.3% in manufacturing. Cairn Energy led gainers in the FTSE 100 index shares with a rise of 4.5% followed by increases in BG Group of 3.4%, in Vedanta Resources of 3%, in BHP Billiton of 2.4%, and Anglo American of 2.3%.

The new governor at the Bank of Japan left key interest rate unchanged at 0.5% and warned that economy is sluggish and private investment from businesses is declining. Japanese steelmakers agreed to pay nearly three times for the coking coal from Australia. Coal miners in Australia have raised prices for the last five years to take advantage of economic boom in China and India. Earlier South Korea agreed with a similar price hike.

China reported a decline in consumer confidence in the first quarter on rising food and energy prices. However, real estate sales continue to surge in March after falling for two months in a row. Stocks in Shanghai plunged 5% as investors worried that earnings in the first quarter will be lower than expected. Hang Seng index fell 1.4% but recovered from larger losses on rising energy and commodities stocks.

Stock in Mumbai edged higher on better than expected earnings from Yes Bank. The bank also said that it has no exposure to derivatives and risky loans linked to the U.S. loans. The news sent stocks in the banking sector higher. Sensex added 1.3% or 203 to 15,790. On the National Stock Exchange CNX Nifty advanced 0.8% or 37 at 4,747. Tata Power got a loan of $450 million to build a power plant in Mundra, Gujarat with a capacity of 4,000 MW.

European Markets indexes

In London FTSE 100 Index closed lower 24.60 or 0.41% to 5,990.20, in Paris CAC 40 Index decreased 31.91 or 0.65% to close at 4,912.69 and in Frankfurt DAX index lower 49.05 or 0.72% to close at 6,771.98. In Zurich trading SMI decreased 71.16 or 0.93% to close at 7,568.14.

North American Markets indexes

Dow Jones Industrial Average lost 49.18 or 0.40% to a close of 12,527.59, S&P 500 closed down 11.01 or 0.91% to 1,354.53, and Nasdaq Composite Index decreased 26.64 or 1.10% to a close at 2,322.12. In Toronto TSX Composite closed down 17.48 or 0.13% to 13,727.53.

Of the 30 stocks in Dow Jones Industrial Average, 4 closed higher, 26 closed lower, and none was unchanged.

General Motors led the decliners in the Dow Jones with a fall of 4% followed by losses in AIG of 2.75%, in Verizon of 2.7%, and in American Express of 2.6%. Boeing led the gainers in the Dow index with a rise of 4% followed by increases in Intel of 0.9%, in Chevron of 0.6% and in Citigroup of 0.25%.