European Stock-Index Futures Tumble; Societe Generale May Drop

By Adria Cimino

Sept. 30 (Bloomberg) -- European stock-index futures sank, extending the worst global sell-off in 21 years, after the House of Representatives rejected a $700 billion rescue plan for financial companies.

U.S.-traded shares of Societe Generale SA, France's third- largest bank by assets, and UBS AG, the European bank hardest hit by subprime-related losses, retreated more than 6 percent. Dexia SA was suspended from trading after the world's biggest lender to local governments received a 6.4 billion-euro ($9.2 billion) state-backed bailout. BHP Billiton Ltd. dropped the most in 21 years in Australia after commodities posted the steepest decline in five decades.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, slid 82, or 2.7 percent, to 2,954 at 7:31 a.m. in London. The U.K.'s FTSE 100 Index may decrease 180, according to Cantor Index, a betting firm. The MSCI World Index of 23 developed markets sank 7 percent yesterday, the biggest loss in 21 years.

``I was disappointed and surprised,'' said Philippe Gijsels, Brussels-based senior equity strategist at Fortis Global Markets with $62 billion under management. ``Now it will take more time. I hope policy makers get their act together and get this resolved by the end of the week,'' he said in a Bloomberg Television interview.

Congressmen voted 228 to 205 against the measure to authorize the biggest government intervention into markets since the Great Depression, sending the Standard & Poor's 500 Index to the steepest drop since the 1987 crash.

Monthly Loss

Europe's Stoxx 600 is down 13 percent this month, on course for the worst slump since September 2002, as Lehman Brothers Holdings Inc. filed for bankruptcy, American International Group Inc. was taken over by the U.S. Treasury and Washington Mutual Inc. was seized by regulators in the biggest U.S. bank failure in history. The measure, poised for a 13 percent drop this quarter, slid the most in eight months yesterday after bank bailouts in Europe accelerated.

American depositary receipts of Societe Generale lost 13 percent from the stock's close in France. ADRs of UBS retreated 6.2 percent from the close in Switzerland.

``The impact of that no vote on Capitol Hill last night will hit European markets hard at the open,'' Matthew Buckland, a dealer at CMC Markets in London, wrote in a note.

Belgium's federal and regional governments, France and the company's largest shareholders will supply the funds to Dexia, according to a statement from Belgian Prime Minister Yves Leterme today.

Mining Shares

BHP, the world's biggest mining company, slid 5.9 percent in Australia after earlier losing as much as 9.9 percent. Rio Tinto Group, the second-largest iron-ore exporter, fell 8.4 percent.

The Reuters/Jefferies CRB Index of 19 commodities yesterday plunged 5.9 percent, the biggest drop since 1956, on concern the spreading financial crisis may slash demand for raw materials.

U.S. notes fell, paring the biggest monthly rally since January. The yen rose to its highest in almost two weeks against the euro and advanced against the dollar.

U.K. consumer confidence stayed close to a record low in September as the financial crisis made shoppers more pessimistic about their personal finances, GfK NOP said.

Arcandor AG, Germany's biggest department-store owner, may slip after JPMorgan Chase & Co. cut its recommendation on the stock to ``neutral'' from ``overweight.''

Rentokil Initial Plc, the world's largest pest-control company, will probably drop. Goldman Sachs Group Inc. added the shares to its ``conviction sell'' list.

Deutsche Telekom AG, Europe's biggest phone company, may be active after Goldman upgraded the shares to ``buy'' from ``neutral'' and added them to its ``conviction buy'' list, citing a ``well covered dividend.''

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.