- Category: Economic
- Published Wednesday, February 10, 2016
- CTV News
Asian stock markets fell for a third consecutive day Wednesday, beset by nerves about shaky global growth, falling oil prices and possible capital shortfalls at major European banks.
KEEPING SCORE: Japan's Nikkei 225 slid 3.8 per cent to 15,476.17 and is down about 12 per cent in the past month. Australia's S&P/ASX 200 shed 1.3 per cent to 4,771.70. Stock benchmarks also fell in Southeast Asia, India and New Zealand. Markets are closed in China, Taiwan, Hong Kong and South Korea for Lunar New Year holidays. Hong Kong and Korea reopen on Thursday and China and Taiwan resume trading on Monday.
BANK DOUBTS: Investors are questioning whether European banks such as Deutsche Bank have sufficient capital after a slump in its share price and a record annual loss. Despite assurances from the German bank, some analysts expect it will need to issue new shares to raise billions of dollars, which is likely to further depress its share price. Banks also face economic headwinds that could slow lending and hurt profits. Some are also exposed to the slump in oil prices via their loans to energy companies. The nerves in Europe have spread to banks worldwide. In Asia, Mizuho Financial was down 3.5 per cent in Tokyo and ANZ fell 1.9 per cent in Sydney.
THE QUOTE: "The central bank life support trade of the past eight years has now created this coma-like scenario where markets cannot return to normal trading," said Evan Lucas, market strategist at IG in Melbourne, Australia. "The artificial support from central banks is at a crossroads. Central bank intervention will no longer create the holding pattern of the past year. Markets now believe banks are out of ammunition," he said in a market commentary.
WALL STREET: U.S. stocks extended a losing streak Tuesday, closing slightly lower after spending most of the day wavering between gains and losses. The Dow Jones industrial average fell 12.67 points, or 0.1 per cent, to 16,014.38. The Standard & Poor's 500 slipped 1.23 points, or 0.1 per cent, to 1,852.21. The Nasdaq composite lost 14.99 points, or 0.4 per cent, to 4,268.76. The latest losses pulled the three indexes further down for the year. The Dow is off 8.1 per cent, the S&P 500 is down 9.4 per cent. The Nasdaq is off 14.8 per cent.
ENERGY: Brent crude, a benchmark for international oils, was up 73 cents at $31.05 a barrel in London. It fell $2.56, or 7.8 per cent, to close at $30.32 the day before. It was about $60 a barrel a year ago and $109 two years ago. Benchmark U.S. crude was up 61 cents at $28.55 a barrel in electronic trading on the New York Mercantile Exchange. The futures contract dropped $1.75, or 5.6 per cent, to close at $27.94 a barrel on Tuesday.
CURRENCIES: The euro rose to $1.1294 from $1.1289 the day before. The dollar fell to 114.50 yen from 114.95 yen.