Asian stocks lower on renewed worries about banking sector

AP News
Posted: Sep 29, 2016 11:12 PM
Asian stocks lower on renewed worries about banking sector

SEOUL, South Korea (AP) — Asian stock markets were lower on Friday as investor sentiment was dented by overnight losses on Wall Street and renewed worries about the health of Deutsche Bank.

KEEPING SCORE: Japan's Nikkei 225 slumped 1.6 percent to 16,435.61 and South Korea's Kospi fell 0.9 percent to 2,051.10. Hong Kong's Hang Seng index retreated 1.3 percent to 23,440.84. Australia's S&P/ASX 200 dropped 0.8 percent to 5,425.80. China's Shanghai Composite Index was up 0.1 percent to 3,000.58. Stocks in Singapore and other Southeast Asian countries were also lower.

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 Deutsche Bank."

BANK WOES: U.S. authorities are seeking $14 billion from Deutsche Bank to settle legal claims over its sales of mortgage securities in 2007 and 2008, which helped kick off a global financial crisis. 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 what will happen to Germany's biggest lender and to the broader financial system if Deutsche Bank runs low on capital. Analysts said the troubles at Deutsche Bank are raising scrutiny over other banks in Europe, which are also in talks regarding mortgage settlement with the U.S. authorities.

WALL STREET: U.S. stocks finished lower on Thursday as drug companies and banks absorbed large losses. The Dow Jones industrial average lost 195.79 points, or 1.1 percent, to 18,143.45. The Standard & Poor's 500 index sank 20.24 points, or 0.9 percent, to 2,151.13. The Nasdaq composite dropped 49.39 points, or 0.9 percent, to 5,269.15.

OIL: Benchmark U.S. crude lost 20 cents to $47.62 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 36 cents to $49.45 a barrel in London.

CURRENCIES: The dollar rose to 101.37 yen from 101.16 yen while the euro fell to $1.121 from $1.122.