TOKYO — Stocks fell in early trading in Europe on Friday, led by banks as Deutsche Bank shares tumbled following news the U.S. Justice Department is seeking a $14 billion settlement over its dealings in mortgage-backed securities before the 2008 financial crisis. Asian trading was light, with regional markets closed for holidays.
KEEPING SCORE: Germany’s DAX slid 0.3 per cent to 10,394.06 and the CAC 40 of France lost 0.4 per cent to 4,335.39. Britain’s FTSE 100 gained 0.2 per cent to 6,745.53. U.S. benchmarks appeared to be headed for a slow start, with both Dow and S&P 500 futures down 0.2 per cent.
DEUTSCHE BANK: Shares in Deutsche Bank AG plunged after the company said it did not intend to pay the $14 billion settlement of potential civil claims as proposed by the U.S. Department of Justice. It described the DOJ’s proposal as the start of “negotiations.” Shares of Germany’s biggest bank were down 7.1 per cent at 12.87 euros ($13.59) in Frankfurt trading. The bank is in a painful transition as it tries to meet tougher regulatory requirements, cut costs and settle multiple legal investigations.
BANK OF JAPAN WATCH: Japan’s central bank increasingly is the focus of attention ahead of a monetary policy meeting on Wednesday. Some analysts believe the Bank of Japan may increase asset purchases up to 100 trillion yen a year from the current 80 trillion yen a year, or take its negative policy rate to minus 0.3 per cent from minus 0.1 per cent.
ANALYST VIEWPOINT: “September used to be touted as the month to watch this year, as markets expect central banks to take decisive actions. While those views have been largely scaled back, central bank decisions will still be at the front and center next week,” Bernard Aw of IG said in a commentary.
ASIA’S DAY: Japan’s Nikkei 225 index gained 0.7 per cent to 16,519.29 and Australia’s S&P ASX 200 added 1.1 per cent to 5,296.70. The Sensex in India climbed 0.6 per cent to 28,592.31. Shares also were higher in Indonesia and Singapore. Markets were closed in China, Hong Kong, Taiwan and South Korea.
BANK OF ENGLAND: Overnight, the Bank of England kept its main interest rate unchanged at a record low of 0.25 per cent after a run of better-than-anticipated news after voters opted to leave the European Union. The Monetary Policy Committee noted a “less negative” near-term outlook for the housing market and better than anticipated consumption data.
OIL PRICES: Benchmark U.S. crude lost 53 cents to $43.38 per barrel in electronic trading on the New York Mercantile Exchange. It rose 33 cents Thursday to $43.91 per barrel. Brent crude, used to price international oils, fell 69 cents to $45.90 per barrel. It gained 74 cents in London.
CURRENCIES: The euro slipped to $1.1230 from $1.1248 while the dollar was flat at 101.97 yen.