Fall for Deutsche Bank drags banking lower

A fall for Deutsche Bank spread to the industry, deepening a selloff that dragged European equities to their biggest weekly plunges since before the UK secession vote.

The Stoxx Europe 600 Index fell 0.7 per cent to a six-week low, down for a sixth time in seven days. In Ireland, the Iseq Overall Index fell 0.7 per cent to 6,085.80.

DUBLIN

Bank of Ireland

and

Permanent TSB

mirrored declines in bank stocks across Europe in the wake of Deutsche Bank’s issue in the US connected with the misselling of mortgage-backed bonds.

Bank of Ireland closed down just more than 1 per cent at 18.8 cent, while PTSB closed down 3.3 per cent at €1.857.

Index heavyweights CRH and Paddy Power Betfair both finished lower by about 0.7 per cent at €29.36 and €103 respectively.

Fruit distributor Fyffes, listed on the junior ESM market, fell 4.6 per cent to €1.51 after raising €45 million through the sale of 31 million shares. The proceeds will be used to maintain its balance sheet strength and liquidity, and provide funds for further acquisitions.

Ryanair was the main gainer on the day, up 1.5 per cent at €13.235.

LONDON

Britain’s top share index fell to record a second straight week of losses as heavyweight bank stocks dropped on the

Deutsche Bank

news. The blue-chip FTSE 100 index closed down 0.3 per cent at 6,710.28 points, posting a loss of around 1 percent over the week.

Royal Bank of Scotland fell 4.4 per cent, while Barclays declined 2.8 per cent, with the European bank sector as a whole hit.

AstraZeneca rose 2 per cent after the company said combining its Forxiga type-2 diabetes drug with older medicine Bydureon was more effective at controlling blood sugar levels than treatment with either drug on its own.

Spire Healthcare, a FTSE 250 mid-cap stock, also jumped 8 per cent following a media report of bid interest from Mediclinic. Mediclinic fell 2.4 per cent.

EUROPE

Shares in Deutsche Bank sank 8.5 per cent, the most since the aftermath of the British referendum, after rebuffing the $14 billion claim from the US justice department to settle a probe.

Credit Suisse also fell more than 4 per cent, along with some Italian and Portuguese firms.

The Stoxx Europe 600 Index fell 0.7 per cent to a six-week low, down for a sixth time in seven days. Concerns about lenders and worries that the region’s central bank may baulk at adding stimulus have sent the gauge to its first back-to-back declines since June and down 2.2 per cent in the past five days.

The Deutsche Bank plunge dragged Germany's DAX Index down 1.5 per cent, the most since August 2nd. The measure also suffered from sliding automakers, with BMW and Volkswagen falling more than 2.5 per cent.

Energy producers resumed their slides as oil declined.

Among other stocks moving on corporate news, Fiat Chrysler Automobiles lost 2.1 per cent after saying it is recalling about 1.4 million cars and trucks in the US.

NEW YORK

US stocks slipped in morning trading to trim a weekly gain as investors awaited next week’s

Federal Reserve

meeting, with economic indicators pointing to uneven growth in the world‘s largest economy.

Banks and energy producers carried some of the steepest losses, with crude oil sinking to a one-month low. Sentiment soured on lenders triggered by Deutsche Bank.

Oracle fell 4.1 per cent after its quarterly revenue missed estimates. Intel climbed 2.5 per cent after raising its sales forecast.

The S&P 500 Index fell 0.5 per cent to 2,136.79 at 11:45am in New York, while the Dow Jones Industrial Average lost 76.19 points, or 0.4 per cent, to 18,136.29. The Nasdaq Composite Index declined 0.2 per cent. – Additional reporting by Bloomberg and Reuters