por admin » Lun Sep 26, 2016 8:42 am
Stocks Down as Banks, Energy Companies Fall
Investors turn focus to meeting of oil producers in Algiers, U.S. election
By RIVA GOLD
Updated Sept. 26, 2016 8:52 a.m. ET
Shares of banks and energy companies lurched lower Monday, deepening Friday’s downturn in global stock markets.
Futures pointed to a 0.4% opening loss for the S&P 500, while the Stoxx Europe 600 fell 1.4%, following losses in Asia.
With major central bank meetings out of the way, global investors largely shifted their focus to a meeting of energy producers and the U.S. presidential election.
Oil and gas companies were among the biggest decliners as major oil producers met in Algiers to discuss a possible deal on limiting production.
OPEC members and Russia have substantial issues to resolve but still expect to make progress toward a comprehensive deal, energy ministers said.
Brent crude gained 1.4% to $47.11 a barrel in choppy trade after prices sank around 4% on Friday.
“We can’t come out empty-handed,” said Nourredine Bouterfa, Algeria’s oil minister, warning that oil prices could drop back into the $30s if OPEC fails to come to terms this week.
Meanwhile, bank shares led declines in Europe with the Euro Stoxx Banks index down 2.6%. Deutsche Bank AG was the worst performer, down as much as 6.7% and at the lowest price in at least 20 years, according to FactSet.
The German lender’s shares have been hit recently by fears it may need a capital increase, after The Wall Street Journal reported this month that the U.S. Justice Department proposed that Deutsche Bank pay $14 billion to settle a set of high-profile mortgage-securities probes.
Deutsche Bank said Monday it wasn’t currently considering a capital increase. “The question isn’t one being posed now,” the bank said.
Analysts also attributed some of the losses to a local magazine report over the weekend suggesting German Chancellor Angela Merkel would rule out assistance for the lender, whose shares are down 52% so far this year.
Earlier, shares in Hong Kong and Shanghai fell by 1.6% and 1.8% respectively, echoing Friday’s losses on Wall Street, while markets in Australia were largely flat.
Investors hope a meeting of oil producers in Algiers might make progress toward a deal on limiting production. ENLARGE
Investors hope a meeting of oil producers in Algiers might make progress toward a deal on limiting production. PHOTO: BLOOMBERG NEWS
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Japan’s Nikkei Stock Average fell 1.3% as banks and life insurance companies were hit by a speech by Bank of Japan Gov. Haruhiko Kuroda suggesting the Japanese central bank was prepared to make further cuts to short-term interest rates. Ultralow or negative interest rates erode banks’ net interest margins, keeping share prices depressed.
The dollar fell 0.5% against the yen to ¥100.5030.
In other currencies, the Turkish lira dropped 0.5% against the dollar to $0.3355 after Moody’s cut Turkey’s credit rating on its debt to junk, while the Philippine peso dropped to a seven-year low against the dollar amid concerns about political instability under President Rodrigo Duterte.
The euro gained 0.3% against the dollar to $1.1258 after data showed German business sentiment unexpectedly improved in September to its highest level since May 2014. European Central Bank President Mario Draghi is scheduled to speak later Monday.
In bond markets, the yield on 10-year German government debt fell to minus 0.097%, while the 10-year U.S. Treasury note fell slightly to 1.601% from 1.615% on Friday. Yields move inversely to prices.
Investors also focused on the U.S. presidential election.
“The market is not pricing in a Trump potential win even though polls have been narrowing,” said Michael Arone, chief investment strategist for State Street Global Advisors.
While stock markets have risen steadily over the summer, he expects the election, alongside the price of oil, to trigger increased volatility in stock markets in October and November.
So far, most of the election-related volatility has been limited to movements in health-care shares and the Mexican peso, analysts said.
The first televised debate is scheduled for Monday evening, and a new Wall Street Journal/NBC News poll found that 34% of registered voters expect the three presidential debates to be important in helping them decide how to vote.
—Benoit Faucon, Madeleine Nissen and Willa Plank contributed to this article.