Shares extend losses on fears over global growth, banks

Saudi Arabian Oil Minister Ali al-Naimi met his Venezuelan counterpart Sunday in Riyadh, the Middle East nation’s Petroleum Ministry said in a statement, without mentioning any steps to shore up the market.

Safe-haven spot gold reached a peak of $1,198.70 an ounce, its strongest since June 22. Yields on the 10-year haven’t been this low since February 2 of last year.

The euro rose 0.2 percent to $1.1182, after earlier weakening.

“The collapse in the oil price has been a big shock to the financial system and its effects are still being absorbed by worldwide stock markets, in particular the implications for global demand”.

Banking stocks took a hefty hit in the FTSE as fears intensified that a slowdown in the Chinese market, the falling price of oil and rock-bottom interest rates could steer the sector towards another meltdown.

Amazon.com, Facebook and Google parent Alphabet slid, bringing declines since Thursday to 5.9 per cent or more in companies that held the market aloft in 2015.

The European banking index fell 4.6 percent after sinking 5.6 percent on Monday on fears of worsening bank profitability and capital strength from sustained low interest rates. USA crude oil prices eased from their session lows, but were still down 2.8 per cent, while Brent was off 2 per cent. Global stock markets have closely tracked the rise and fall in the price of the oversupplied commodity this year.

Germany’s DAX Index fell 3.3 per cent, heading toward its lowest level since 2014. The Dow Jones Industrial Average futures pointed to a 0.52% drop, S&P 500 futures a 0.51% decline while the Nasdaq 100 futures indicated a 0.37% slide.

Bonds such as these are relatively new and investors have been attracted to them because they pay relatively high coupons, or returns, to investors.

The yen strengthened to a one-year high, extending gains after its best week since 2009. Gold was on track for its longest rally since 2011 as the yen extended gains to surpass 115 per dollar.

The pound was up a cent against the dollar at 1.44, while the pound was down a cent against the euro at 1.28.

Germany’s government bonds advanced, pushing the two-year yield to the lowest on record.

If you’ll be in London on Tuesday, Feb. 23, you’re invited to join us for an evening of cocktails and conversation on the topics of shifting monetary policy, growth, currencies, and the outlook for investing opportunities and risks in European and global markets. It’s down about $8 at $1,190. Deutsche said it has sufficient capacity this year and next. The employment report lends weight to the case for the Federal Reserve to delay interest rate hikes, which is a positive for stock markets, but also adds to signs of weakness in major economies.

The banking sector was worst hit; among those that tumbled were Deutsche Bank, BNP Paribas, Santander and Barclays.

Strategists at Goldman Sachs said banks had enough liquidity and that recent capital hikes should reduce the risk of a financial crisis re-run.

MSCI’s all-country world equity index was last down 6.72 points or 1.83 percent, at 359.85. The index hasn’t been that high since July 2013, based on CMA data. Japan’s Nikkei shaved off 800 points this morning and the SGX Nifty was pointing towards another round of brisk selling in the domestic market.

Banks dragged the main European stockmarket indices lower again on Tuesday, with investors cautious amid on-going concerns over global growth and the possibility that tensions in some credit markets might be feeding-through into stocks.