European equities slide as Deutsche Bank drags
European stocks sank yesterday after Germany’s troubled Deutsche Bank unveiled plans over the weekend to raise 8.0 billion euros ($8.5 billion) in fresh capital.
Sentiment also remained downbeat as investors took profits from last week’s surge, which was rooted on hopes of a public spending splurge under US President Donald Trump. “The Deutsche Bank drag on the banking sector, as well as the continued weariness following last Wednesday’s record-breaking surge, continued to set the tone of trading,” said analyst Connor Campbell at trading firm Spreadex.
Shares in Germany’s biggest lender dived 6.37 percent to 17.92 euros, topping the Frankfurt fallers board, after announcing Sunday it would raise cash by issuing new shares. The announcement marked a U-turn for CEO John Cryan, who until recently insisted no such move was needed. “European shares have begun the week on the back foot with the financial sector weighing,” noted analyst David Cheetham at brokerage XTB.
“News over the weekend that Deutsche Bank will reverse course less than two years into CEO John Cryan’s strategy has been met with a negative reaction from investors.” Royal Bank of Scotland shares slid 1.9 percent and Lloyds shed 1.5 percent in London, while BNP Paribas and Societe Generale dropped 0.6 percent and 0.5 percent respectively. London won a partial boost, however, after British financial services group Standard Life agreed to buy Aberdeen Asset Management for £3.8 billion ($4.7 billion, 4.4 billion euros) to create one of the world’s biggest fund managers. The combined business will have a stock market capitalization of £11 billion and oversee assets worth £660 billion-making it one of the largest investment managers in the world and the biggest in Britain.
The news sent Standard Life’s share price 5.68 percent higher, while Aberdeen stock gained almost five percent. In Asia, Tokyo stocks fell and the safe-haven yen advanced after North Korea fired four missiles-three of them landing in Japanese waters-fuelling fresh geopolitical concerns. But Asia’s other markets started the week with gains after another positive lead from Wall Street and remarks by Federal Reserve boss Janet Yellen that US interest rates would more than likely be hiked this month as the economy continues to improve.
Japanese Prime Minister Shinzo Abe warned the threat from North Korea had “entered a new stage” following the missile launch, which came after Pyongyang fired a rocket last month.
Hong Kong stocks rose 0.2 percent and Shanghai finished 0.5 percent higher.
Stocks in Tokyo fell yesterday and the safe-haven yen advanced after North Korea fired four missiles — three of them landing in Japanese waters — fuelling fresh geopolitical concerns. But Asia’s other markets started the week with gains after another positive lead from Wall Street and remarks by Federal Reserve boss Janet Yellen that US interest rates would more than likely be hiked this month as the economy continues to improve.
Japanese Prime Minister Shinzo Abe warned the threat from North Korea had “entered a new stage” following the missile launch, which came after Pyongyang fired a rocket last month. “Investors seem to be reacting to the North Korean missile launch,” Hiroaki Hiwada, a strategist at Toyo Securities, told Bloomberg News. — AFP