World Economy

Asian, European Stocks Fall, No Breakthroughs Expected

Asian, European Stocks Fall, No Breakthroughs ExpectedAsian, European Stocks Fall, No Breakthroughs Expected

Asian as well as European shares were broadly lower Monday, as traders largely gave up hope for an oil breakthrough this week and as the Bank of Japan flagged that it remained committed to negative rates.

On Friday, the S&P 500 fell 0.6% and the Dow Jones Industrial Average shed 0.7% as a sharp drop in oil prices hit energy stocks, Nikkei reported.

Analysts have low expectations for any breakthroughs in oil production cuts when the Organization of the Petroleum Exporting Countries gathers for an informal meeting in Algiers this week. OPEC has already failed at several attempts to impose some sort of production cap over the past year.

The Malaysian ringgit was down 0.6%. The Malaysian economy is heavily dependent on oil exports.

Elsewhere, a speech by Bank of Japan Governor Haruhiko Kuroda on Monday weighed heavily on Tokyo banking and life insurance stocks. Kuroda’s words strengthened concerns that the BoJ was prepared to take short-term interest rates deeper into negative territory, despite the implications for bank profits.

Sumitomo Mitsui Trust Holdings finished down 1.4% and Dai-ichi Life tumbled 4.9%.

The Philippine peso dropped to a seven-year low against the US dollar.

Australian shares finished steady following four straight sessions of gains.The S&P/ASX 200 edged up 0.1 point to 5431.4, the highest closing level since Aug. 31.

Meanwhile, European stocks also fell on Monday, weighed down by a pullback in the shares of major banking and energy companies, with Deutsche Bank hitting a record low, Reuters reported.

The pan-European STOXX 600 index fell 1.3%. The index remains down by around 7% since the start of 2016.

The STOXX Europe 600 Banking index fell 2.3%, as Deutsche Bank shares touched a record low.

British bank Lloyds also declined 3.1% after Goldman Sachs cut its rating on Lloyds to “sell” from “neutral”.

The broader European banking index is down by around 20% since the start of 2016—the worst-performing equity sector in Europe this year—as the industry has been impacted by concerns that negative interest rates will hit the profitability of banks.

The STOXX Europe 600 Oil & Gas index also fell 1.5%, reflecting a sharp drop in oil prices in recent sessions.

Among other individual stock movers, Lanxess surged 8.1% after it said it would buy specialty chemical company Chemtura for about €2.4 billion ($2.69 billion) including debt.

Shares in fertilizer company K+S fell 5.7% after Deutsche Bank cut its rating on the stock to “sell” from “hold”.