FRANKFURT, Germany — European banks led the region’s stock markets lower Friday as Deutsche Bank shares tumbled following news the U.S. Justice Department is seeking a $14 billion settlement over its dealings in mortgage-backed securities before the 2008 financial crisis.
KEEPING SCORE: In Europe, Germany’s DAX slid 1.3 percent to 10,293.12 and France’s CAC 40 of France lost 1.1 percent to 4,323.22. Britain’s FTSE 100 was off 0.4 percent to 6,703.11. U.S. benchmarks appeared to be headed for a slow start, with both Dow and S&P 500 futures down 0.4 percent.
DEUTSCHE BANK: Shares in Deutsche Bank AG plunged after the company said it did not intend to pay the $14 billion proposed by the U.S. Department of Justice to settle civil claims. It described the proposal as the start of “negotiations.” Shares of Germany’s biggest bank were down 7.1 percent at 12.87 euros ($13.59) in Frankfurt trading. Bank stocks across the region fell in Deutsche’s slipstream. Among those were Commerzbank, which was down 3 percent and Royal Bank of Scotland, which fell by 5.3 percent.
ANALYST TAKE: Mike van Dulken, Head of Research at Accendo Markets, said a retreat in bank shares was partly to blame for the soft performance in Europe. “This has understandably sent ripples across the sector,” he said.
BANK OF JAPAN WATCH: Japan’s central bank increasingly is the focus of attention ahead of a monetary policy meeting on Wednesday. Some analysts believe the Bank of Japan may increase asset purchases up to 100 trillion yen a year from the current 80 trillion yen a year, or take its negative policy rate to minus 0.3 percent from minus 0.1 percent.
ASIA’S DAY: Japan’s Nikkei 225 index gained 0.7 percent to 16,519.29 and Australia’s S&P ASX 200 added 1.1 percent to 5,296.70. The Sensex in India climbed 0.6 percent to 28,592.31. Shares also were higher in Indonesia and Singapore. Markets were closed in China, Hong Kong, Taiwan and South Korea.
OIL PRICES: Benchmark U.S. crude lost 77 cents to $43.14 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, fell 87 cents to $45.72 per barrel. It gained 74 cents in London.
CURRENCIES: The euro slipped 0.1 percent to $1.1227 while the dollar was off 0.3 percent against the yen at 101.97 yen.