Asian stock markets fell for a third consecutive day Wednesday, beset by nerves approximately shaky global growth, falling oil prices & possible capital shortfalls at major European banks.
KEEPING SCORE: Japan’s Nikkei 225 slid 3.8 percent to 15,476.17 & is down approximately 12 percent in the past month. Australia’s S&P/ASX 200 shed 1.3 percent to 4,771.70. Stock benchmarks moreover fell in Southeast Asia, India & New Zealand. Markets are closed in China, Taiwan, Hong Kong & South Korea for Lunar New Year holidays. Hong Kong & Korea reopen on Thursday & China & Taiwan resume trading on Monday.
BANK DOUBTS: Investors are questioning whether European banks such as Deutsche Bank have sufficient capital after a slump in its share price & a record annual loss. Despite assurances from the German bank, some analysts expect it will need to issue new shares to raise billions of dollars, which is likely to further depress its share price. Banks moreover face economic headwinds that could slow lending & injure profits. Some are moreover exposed to the slump in oil prices via their loans to energy companies. The nerves in Europe have spread to banks worldwide. In Asia, Mizuho Financial was down 3.5 percent in Tokyo & ANZ fell 1.9 percent in Sydney.
THE QUOTE: “The central bank life support trade of the past eight years has now created this coma-like scenario where markets cannot return to normal trading,” said Evan Lucas, market strategist at IG in Melbourne, Australia. “The artificial support from central banks is at a crossroads. Central bank intervention will no longer create the holding pattern of the past year. Markets now believe banks are out of ammunition,” he said in a market commentary.
WALL STREET: U.S. stocks extended a losing streak Tuesday, closing slightly lower after spending most of the day wavering between gains & losses. The Dow Jones industrial average fell 12.67 points, or 0.1 percent, to 16,014.38. The Standard & Poor’s 500 slipped 1.23 points, or 0.1 percent, to 1,852.21. The Nasdaq composite lost 14.99 points, or 0.4 percent, to 4,268.76. The latest losses pulled the three indexes further down for the year. The Dow is off 8.1 percent, the S&P 500 is down 9.4 percent. The Nasdaq is off 14.8 percent.
ENERGY: Brent crude, a benchmark for international oils, was up 73 cents at $31.05 a barrel in London. It fell $2.56, or 7.8 percent, to close at $30.32 the day before. It was approximately $60 a barrel a year ago & $109 two years ago. Benchmark U.S. crude was up 61 cents at $28.55 a barrel in electronic trading on the New York Mercantile Exchange. The futures contract dropped $1.75, or 5.6 percent, to close at $27.94 a barrel on Tuesday.
CURRENCIES: The euro rose to $1.1294 from $1.1289 the day before. The dollar fell to 114.50 yen from 114.95 yen.
Singapore International News
Source: “Associated Press”