By Kenan Machado
A decline in global financial stocks led by Deutsche Bank weighed on Asian stock markets Tuesday.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +0.70% was down 0.1%, paring earlier declines led by financial stocks amid a stronger yen. Mitsubishi UFJ Financial /zigman2/quotes/207520099/delayed JP:8306 +0.90% lost 0.4% and Resona /zigman2/quotes/203178794/delayed JP:8308 -0.08% was down 0.9%.
Financial stocks in the region were weighed down by the overnight selloff in banking stocks in the U.S. and Europe. The selling began Monday, with Deutsche Bank /zigman2/quotes/205502669/delayed DE:DB1 +1.19% ending down 7.9% in Frankfurt as the market digested news that it was seeking 8 billion euros ($8.5 billion) in cash from shareholders.
In Australia, the S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.04% traded 0.5% higher, recovering from early declines after mining stocks fell amid softness in commodity prices. Rio Tinto /zigman2/quotes/200083756/delayed AU:RIO +1.41% recovered to trade flat from earlier declines. BHP Billiton /zigman2/quotes/201448516/delayed AU:BHP +1.55% lost 0.3%.
China is due to release data Tuesday on its foreign-exchange reserves, a key indicator of capital flight from the country. That will be closely watched, with a likely impact on the offshore traded yuan.
Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.09% was up 0.5% as it recovered from Monday morning’s one-month low following North Korea’s missile tests and China’s ban on tour groups to South Korea. Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.88% was up 0.4%.
Looking ahead, the U.S. is set to release jobs data Friday. Strong numbers would all but confirm a March interest-rate rise by the U.S. Federal Reserve. Rapid U.S. rate rises could spark a rapid exodus of capital from Asian emerging markets, analysts caution.
“With the jobs data due Friday, you are going to see a lot of volatility in interest-rate sensitive stocks,” said Andrew Sullivan, managing director of sales trading at Haitong Securities International.
The odds of a March rate increase have risen to 86.4% according to CME data.