* Deutsche Bank shares fall 8 percent to below 10 euros
* End of quarter, upcoming data adds to jitters
* Euro hits 8-week low vs safe-haven Swiss franc
* Oil pulls back after two day surge
* Only two stock markets set of quarterly fall
* Oil pulls back after Thursday gains on OPEC supply curb
By Marc Jones
LONDON, Sept 30 An eight percent slump in
Deutsche Bank's already battered share price sent Europe into a
fresh tailspin on Friday and left world equity markets sliding
toward their worst week in three months.
Germany's biggest lender, Deutsche, hit by a string of fines
for wrongdoing and a sharp fall in its revenues, saw its shares
drop below 10 euros for the first time in its history
in a brutal European open.
It followed reports that a number of hedge funds that clear
derivatives trades with Deutsche had withdrawn some of their
cash and adjusted positions, a sign that counterparties were
becoming wary of doing business with it.
The turbulence spilled into currency and bond markets again
too with the euro falling to a two-month low of 1.081 against
the safe-haven Swiss franc and buyers flocked to
German government bonds driving down their yields.
"It is fear itself," National Australia Bank's London-based
Global Head of Forex Nick Parsons said about the Deutsche Bank
"The problem is we have had previous experiences of bank
failures and they are still very fresh in the memory and it is
making for a very nervous backdrop."
As if that wasn't enough, markets were at traditionally
illiquid end-of-quarter point and for those investors who run
their books September to September it was the even tighter end-
of-year crunch time.
In a sea of red, London's FTSE 100 was down 1
percent, Germany's DAX and France's CAC 40 both
fell 1.5 percent while banks across Europe were down 4
percent and almost 6.5 percent for the week.
Britain's sterling was heading for its fifth
consecutive quarter of losses against the dollar in the currency
markets - its worst run since 1984 - as concerns about the UK's
Brexit plans, or lack of, have continued to bite.
There were still some positives to hold on to. For the
quarter, only two stock markets look to be set for losses -
Mongolia and the Philippines.
Latin America, and Brazil in particular, remains the star
performer. Sao Paulo stocks have seen another 15 percent jump
this quarter taking their gains for the year to a whopping 62
Overnight, MSCI's broadest index of Asia-Pacific shares
outside Japan lost 1 percent. But it is poised
for a 1.7 percent gain in September, and a 9 percent jump in the
A raft of data out of the United States next week is also
contributing to market jitters, with the chance of a Federal
Reserve interest rate hike in December still seen at around
Numbers to watch include September manufacturing and August
construction spending data on Monday, non-manufacturing indexes
for September and August factory orders on Wednesday and
non-farm payrolls for September on Friday.
"People are very nervous going in to next week, with risk
factors including the U.S. election and economy, with payrolls
coming out next week," said Stefan Worrall, director of Japan
equity sales at Credit Suisse in Tokyo. "So it's normal to
expect volatility in an air pocket of uncertainty."
Japan's Nikkei closed down 1.5 percent after
weaker-than-expected consumption and inflation data. It recorded
a loss of 2.6 percent for the month, but ended the quarter up
While industrial output beat expectations in August, that
did little to lift pressure on the central bank to ease monetary
Some Bank of Japan board members doubted whether the central
bank's overhaul of its massive stimulus programme, announced
last week, would enhance flexibility of monetary policy, a
summary of opinions at the central bank's September rate review
showed on Friday.
China's CSI 300 index bucked the regional trend to
rise 0.3 percent, paring losses for the month to 2.1 percent.
China's factory activity inched up in September, in line
with analyst forecasts, but growth was tepid. Output expanded in
September but at the slowest pace in three months.
Chinese markets are closed for the National Day holiday all
Oil prices pulled back after rising 7 percent in two days
after OPEC agreed to its first output cuts in eight years.
Even if production is scaled back, some analysts doubted the
reduction would be enough to make a substantial dent in the
global crude glut.
"The accord has not yet defined individual quotas or other
forms of accountability, suggesting that this is a soft output
cut at best," Francisco Blanch, commodity and derivatives
strategist at Bank of America Merrill Lynch, wrote in a note.
"OPEC's action won't propel prices much above our $70
mid-year target," he added.
U.S. crude futures slipped 0.8 percent to $47.48.
They closed up 1.7 percent at $47.83 on Thursday, after climbing
to as high as $48.32, the highest level in almost five weeks.
They're on track for gains of 6.2 percent in September.
(Additional reporting by Nichola Saminather in Singapore;
Editing by Richard Balmforth)