- Asian stocks dipped early on Wednesday amid smoldering banking sector concerns, particularly banks in Europe, while the safe-haven yen stood atop large gains made overnight.
Equity markets remained wobbly after being hit hard early in the week by worries about the health of the euro zone banking sector, with a very easy monetary policy seen crimping bank profits and consequently their ability to repay debt.
Trouble for equities has meant a boon for government bonds, with the Japanese government bond 10-year yield dropping into the negative for the first time on Tuesday and the U.S. Treasury benchmark yield declining to a one-year trough.
US equities rallied late in the session to finish close to flat, despite heavy losses across the globe and further weakness in oil prices.
- The Dow Jones fell 12.67 points, the S&P500 eased 1.23 points whilst the tech heavy Nasdaq declined 14.99.
- There were losses in energy (-2.5%) and telecoms (-1.1%) whilst materials (+1.2%), staples (+0.60%) and industrials (+0.50%) were higher on the day.
- European shares fell for a seventh consecutive session to 2 year lows. Concerns surrounding the banking sector weighed on sentiment with the Euro STOXX Banking Index down another 4%.
- The FTSEurofirst 300 Index fell 1.6%, the German Dax lost 1.1% whilst the UK FTSE eased 1.0%.
- Deutsche Bank’s share price is in free fall after attempts to calm speculation about the finances of Germany’s largest bank backfired. Even chief executive John Cryer issued a statement on Monday insisting the Frankfurt-based bank was “rock solid”.
But shares started to fall in early trading on Tuesday and kept going down.
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