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Category: Business, Economics and Finance / Company News / Markets / Currency / Futures / Stockmarket

Deutsche Bank concern drags markets down

Friday, 30 Sep 2016 06:57:12 | Rebecca Hyam

Major banks were a drag on Wall Street overnight. (File photo: AFP)

Concerns about the financial stability of Germany's largest bank dominated activity on global markets overnight, and a decline in Apple's share price weighed on Wall Street.

Markets at 7:30am (AEST):

  • ASX SPI 200 futures -0.6pc to 5,428
  • AUD: 76.3 US cents, 58.85 British pence, 77.11 Japanese yen, 67.9 eurocents, $NZ1.052
  • US: S&P 500 -0.9pc to 2,151, Dow Jones -1.1pc to 18,143, Nasdaq -0.9pc to 5,269
  • Europe: - 0.1pc to 324.08, FTSE +1pc to 6,919, DAX -0.3pc to 10,405
  • Commodities: Gold -0.1pc to $US1,320 an ounce, Brent crude oil +0.9pc to $US49.12 a barrel, iron ore $US56.10 a tonne

News agency Bloomberg reported that certain hedge funds which clear derivatives trades with Deutsche Bank, have withdrawn some excess cash and positions held at the bank.

In its morning note Westpac wrote the development increased anxiety about the health of the German lender, with its shares having already fallen by 57 per cent this year to date.

The bank's US-traded stock slumped more than seven per cent overnight, dragging the broader financial sector down.

Citigroup lost 1.8 per cent and JPMorgan Chase closed 1.5 per cent lower.

Shares in Wells Fargo & Co were also down, after US law-makers continued their criticism of the bank's chief executive, John Stumpf, over his handling of sales abuses.

Those included the opening of more than two million fake accounts by Wells Fargo employees, on behalf of customers, to inflate sales figures.

Apple was by far the biggest drag on the Dow, shedding 1.4 per cent, after Barclays cut the technology giant's price target.

In official economic news, the third and final update on second quarter US GDP was revised up by more than expected to 1.4 per cent.

Exports and business investment were the main sources of the upward revision and business investment now shows one per cent annualised growth in the quarter.

European shares experienced mixed fortunes overnight, with losses among pharmaceutical makers offset gains among energy shares, after OPEC's deal yesterday to reduce output.

The local market is expected to return some of yesterday's gains, with the ASX SPI 200 down 0.6 per cent at 8.40am AEST.

At the same time, the Australian dollar was worth 76.3 US cents, having come under pressure overnight.

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