Global stocks fell on Friday despite easing concerns over bank loans and the U.S.–China trade war. U.S. President Donald Trump announced that he will meet China’s Xi Jinping at the upcoming APEC summit in South Korea, which helped calm the market after a sharp decline the previous week. Trump had earlier threatened 100 percent tariffs on China over its rare‑earth export controls, but in a recent interview he said such tariffs were “not sustainable.” According to Chris Beauchamp, chief market analyst at IG, Trump’s comments lifted equities from their lows.
Sentiment, however, had soured on Thursday after two regional U.S. banks disclosed loan problems, triggering a sell‑off in banking stocks. Fawad Razaqzada, market analyst at City Index and Forex.com, said credit risk at U.S. regional banks added to existing worries about the trade‑war dispute, sluggish global growth and stretched valuations. Wall Street’s main indices could not hold early gains, even though regional‑bank shares recovered somewhat after the sell‑off. Investors have been watching the U.S. banking sector nervously since parts of First Brands and subprime lender Tricolor filed for bankruptcy in September. Zions Bancorp rose 3.4 percent on Friday after a 13.1 percent plunge the day before, and other regional banks also recouped some losses.
In Europe, major indices fell, with bank shares hit hard. Deutsche Bank slumped 6 percent, France’s Société Générale fell nearly 5 percent, and Britain’s Barclays dropped 5.7 percent. Hong Kong and Shanghai indices each fell more than 2 percent, and Tokyo closed lower. The banking worries drove safe‑haven gold to a new record and prompted a move into government bonds. The ongoing U.S. government shutdown has delayed the release of key economic data that the Federal Reserve uses to set policy, adding to market unease. Nonetheless, expectations of at least one more Fed rate cut this year have given traders some support.
The Argentine peso weakened against the dollar on Friday as legislative elections approach later this month, despite the United States doubling its support for the currency to $40 billion. At 15:30 GMT, the New York Dow was up less than 0.1 percent, while the S&P 500 and Nasdaq Composite were down 0.2 percent and 0.5 percent, respectively. The London FTSE 100 fell 0.9 percent; the Paris CAC 40 and Frankfurt DAX were down 0.2 percent and 1.8 percent. The Tokyo Nikkei 225, Hong Kong Hang Seng, and Shanghai Composite all declined, and both the euro and pound lost ground against the dollar.
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