* Deutsche Bank shares go below 10 euros before clawing back
* 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 A fresh slump in Deutsche Bank's
share price sent European markets into a tailspin on Friday and
left world stocks sliding toward their worst week in three
Hit by a string of fines for wrongdoing and a sharp fall in
its revenues, Germany's biggest lender saw its shares drop as
much as 9 percent and to below 10 euros for the first
time before clawing back roughly half that lost ground.
The selloff 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that clear derivatives trades with Deutsche had withdrawn some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.
Deutsche Bank's CEO sent an email to staff seeking to
reassure them but the turbulence spilled across all markets.
The euro fell to a two-month low of 1.081 against the
safe-haven Swiss franc and jittery buyers flocked to
German government bonds, driving down their
Futures prices pointed to a second day of falls for
Wall Street too and although they were expected to be more
modest than in Europe, the S&P 500 and Dow looked set for their
first weekly loss in three.
"It is fear itself," National Australia Bank's London-based
Global Head of Forex Nick Parsons said of the Deutsche Bank
angst. "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."
Tight liquidity at the end of the quarter -- and year-end
for some funds -- may have exacerbated some market moves.
In a sea of red, London's FTSE 100 was down 1
percent, while Germany's DAX and France's CAC 40
fell 1.1 and 1.5 percent. Banks across Europe
were down almost 4 percent and nearly 6.5 percent on the week.
The euro was almost universally lower
while worries about a post-EU deal for Britain left the pound
heading for its fifth consecutive quarter of losses
against the dollar. That is its worst run since 1984.
A Reuters poll on Friday showed European investors have cut
their exposure to British stocks to a two-year low and to the
lowest since last May for euro zone holdings due to the
continued Brexit uncertainty.
"Brexit represents an important shock to the outlook, with
further implications expected in the months to come," said
Matteo Germano, global head of multi asset investments at
There were some positives. The euro zone saw deflation
worries ease while only three stock markets look set for
quarterly losses -- Poland, Mongolia and the
Latin America, and Brazil in particular, have had another
storming quarter. Its stocks are up another 15 percent
to take their gains for the year to a whopping 62 percent.
Overnight, MSCI's broadest index of Asia-Pacific shares
outside Japan lost 1 percent. But it is poised
for a 9 percent jump in the third quarter.
With the chance of a Federal Reserve interest rate hike in
December still seen at around 50-50, a raft of U.S. data due
next week was also contributing to market jitters.
"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, but was up
5.6 percent from Q2.
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.
Oil prices pulled back after rising 7 percent in two days
after OPEC agreed to its first output cuts in eight years.
"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
U.S. crude futures slipped 0.4 percent to $47.65.
They closed up 1.7 percent at $47.83 on Thursday, after climbing
to a nearly five-week high of $48.32 and were on track for gains
of 6.2 percent in September. Brent dipped to $48.73.
(Additional reporting by Nichola Saminather in Singapore;
Editing by Richard Balmforth)