It appears stock markets around the globe are suffering with a case of the Monday blues, with the weakness seemingly emanating out of Germany as the troubles mount for Deutsche Bank (DE:DBKGn), with shares falling more than 6% to all-time lows.
Capital concerns mount for Deutsche Bank
Reports over the weekend that Chancellor Merkel has ruled out any state support for Deutsche Bank has seen some sharp selling of the stock from the open in Frankfurt. The lender has lost more than half of its market value so far this year with the latest development coming from a potential $14 billion fine from the Department of Justice regarding a probe into residential mortgage-backed securities, which is more than twice the $6.2 billion that Deutsche Bank has set aside for litigation. With the firm’s market cap currently around $18 billion, and the chances of a bailout looking slim it is clear investors are fearing the worst and the declines in the stock seen today are weighing not just on the German index, but also souring market sentiment.
FTSE deep in the red
The UK blue-chip stock index is deep in negative territory this morning, with the FTSE 100 lower by just over 85 points. Banking stocks are amongst the worst performers - due in part to the situation seen at Deutsche Bank - with Lloyds (LON:LLOY) and Barclays (LON:BARC) off by approximately 3% at the time of writing. As you would expect with a sizeable decline, the selling has been fairly widespread with shares ranging from Intercontinental Hotels Group (LON:IHG) to ITV (LON:ITV) seeing significant losses. The breadth of this morning’s move means few companies are showing gains so far, with only half a dozen stocks rising.
OPEC members convene
The International Energy Forum has begun its two-day event in Algeria, with talk of some collaboration amongst OPEC members to freeze output once more garnering a lot of attention. The countries in OPEC are expected to hold some informal talks following the forum, with some speculating that there may be an emergency meeting called if they can come together on terms. The cartel’s next scheduled meeting is just over a month away, so it appears unlikely they would take this drastic action, but rumours supporting or dismissing this notion have been driving the oil price lately. We’ve seen some strong selling on Friday evening following comments from a Saudi minister, which seemed to insinuate that a deal would not be reached. The December contract for Brent Oil currently trades 0.24% higher the day at $46.78.