3:00AM New York, 7:00PM Sydney – The widening credit market crisis dragged Australian stocks lower. Heinz agrees to buy Golden Circle for A$200 million.

The fears of widening banking sector crisis from the U.S. to Europe stunned investors in Asia. At the opening, Japan and other regional markets declined sharply. Indonesia plunged 10% and India, China and Hong Kong declined to 2 year lows. Australian indexes dived on the worries that the economies of the developed nations are transitioning from a slow down to a recession conditions.

The European nations leaders struggled to find a regional solution to the rapidly growing European banking crisis. On Saturday, heads of France, Germany, Italy and UK met in Paris to form a regional solution but failed to agree on a cross border bailout plan.

After the meeting, Germany raised its protection to bank deposits and was forced to offer 50 billion in bailout to the second largest lender Hypo Real Estate Holding. The Netherlands seized Fortis operations in the country and Belgium and Luxembourg agreed to sell Fortis operation to France based BNP Paribas SA. Unicredit in Italy was forced to raise capital and offer its current year dividend in stock.

Market Sentiment

In Sydney trading ASX 200 fell 3.3% or 155 to 4,540.40.

Of the ASX 200 index stocks 12 rose, 182 declined, and 6 were unchanged. Suncorp-Metway led advancers in the index shares with a rise of 3.8% after the company reported that it is in preliminary sales negotiations of its wealth management units.

BNP Paribas Acquires Fortis Assets in Belgium and Luxembourg

French bank BNP Paribas reported on its Web site today that it has agreed to purchase the operations of troubled Fortis in both Belgium and Luxembourg, including the international banking franchises for 14.5 billion euros.

Under the terms of the transaction, BNP Paribas will acquire from the Belgian State 75% of Fortis Bank SA/NV and 100% of Fortis Insurance Belgium, and acquire 16% of Fortis Banque Luxembourg from the Luxembourg State, shoring its controlling interest in Fortis Banque Luxembourg to 67%.

For the banking business in Belgium and Luxembourg, the lender will pay 9 billion euros in approximately 132.6 million newly-issued BNP Paribas shares, while Fortis insurance will be acquired for a cash consideration of 5.5 billion euros.

As a result, the states of Belgium and Luxembourg will become shareholders with 11.6% and 1.1% equity correspondingly, with the former state appointing two board members to join BNP Paribas board.

BNP Pariba''s portfolio now include 1,458 branches located in Belgium, Luxembourg, the Fintro branch network in Belgium, and investment management activities that include former ABN AMRO Asset Management.

Effectively the financial institution''s footprint is now in Italy, France, Belgium and Luxembourg.

Fortis'' units in Belgium and Luxembourg have 3 million and 280,000 retail clients respectively.

Germany Rescues 50 billion euro in Hypo Real Estate

The German government, the central bank Bundesbank and market regulators have agreed with the financial services sector for a 50-billion-euro bailout package for Hypo Real Estate.

The Government also added that the initial contribution of 26 billion euros to Hypo will remain unchanged, notwithstanding the increase in the package''s total value to 50 billion euros.

Gainers & Losers