Global Stocks Lower Friday 09/30 05:39
Global stock markets were sharply lower Friday as investor sentiment was
dented by renewed worries about the financial health of Deutsche Bank following
reports that some hedge funds were moving their businesses out of Germany's
SEOUL, South Korea (AP) -- Global stock markets were sharply lower Friday as
investor sentiment was dented by renewed worries about the financial health of
Deutsche Bank following reports that some hedge funds were moving their
businesses out of Germany's biggest bank.
KEEPING SCORE: European stocks started lower. Britain's FTSE 100 fell 1.1
percent to 6,847.05 while France's CAC 40 sank 1.7 percent to 4,366.89.
Germany's DAX lost 1.6 percent to 10,243.71. Futures augured a tepid start on
Wall Street. S&P futures and Dow futures both lost 0.2 percent.
ANALYST'S TAKE: "Risk sentiment waned overnight as worries about global
banks weighed on markets," said Alex Wijaya, senior sales trader at CMC Markets
in Singapore. "Stock markets worldwide are rattled by the latest development at
BANK WOES: Shares of Deutsche Bank nosedived to below 10 euros a share for
the first time after reports said some hedge funds have taken measures to
reduce risks associated with the German bank. The company has been a source of
concerns for investors for weeks since U.S. authorities disclosed that they are
seeking $14 billion from the bank to settle legal claims over its sales of
mortgage securities in 2007 and 2008. The bank said it had struck a deal to
sell a subsidiary and stressed that it was not seeking government help, but
investors are worried about what will happen to Germany's biggest lender and to
the broader financial system if Deutsche Bank runs low on capital. Analysts
said the bank's troubles are raising scrutiny over other banks in Europe, which
are also in talks regarding mortgage settlements with U.S. authorities.
CHINA OUTPUT: The Caixin monthly purchasing managers' index, which is
closely watched for insights into China's economy, ticked up to 50.1 for
September from the previous month's 50.0 reading. The tiny expansion in
activity and gains in overall new orders for the third straight month offered a
glimmer of hope for the world's second-largest economy that has been grappling
with a prolonged slowdown. But the private survey result was not strong enough
to relieve investors outside China.
ASIA'S DAY: Japan's Nikkei 225 slumped 1.5 percent to 16,449.84 and South
Korea's Kospi fell 1.2 percent to 2,043.63. Hong Kong's Hang Seng index sank
1.9 percent to 23,297.15. Australia's S&P/ASX 200 dropped 0.7 percent to
5,435.90. China's Shanghai Composite Index was up 0.2 percent to 3,004.70.
Stocks in Singapore and other Southeast Asian countries were lower.
OIL: Benchmark U.S. crude lost 54 cents to $47.29 per barrel in New York.
The contract gained 78 cents, or 1.7 percent, to close at $47.83 a barrel on
Thursday. Oil prices surged earlier this week after the nations of OPEC, which
collectively produce more than third of the world's oil, agreed to a small cut
in production in a surprise decision. Brent crude, the international benchmark,
fell 61 cents to $49.20 a barrel in London.
CURRENCIES: The dollar fell to 101.03 yen from 101.16 yen while the euro
weakened to $1.118 from $1.122.