World shares retreat after Wall St ends lower

World shares skidded following a retreat on Wall Street driven by concerns over banks’ loan portfolios. The future for S&P 500 fell 1.3 per cent while that for the Dow Jones Industrial Average shed 1 per cent. Oil prices were lower while the price of gold climbed to over $4,383 an ounce, and was last trading at $4,356.50 per ounce, as Washington and Beijing swapped harsh words over trade.

In early European trading, a sell-off of bank and financial shares weighed on regional indexes. Germany’s DAX slumped 2 per cent to 23,783.64. Britain’s FTSE 100 fell 1.5 per cent to 9,293.24 while in Paris, the CAC 40 shed nearly 0.8 per cent to 8,126.52.

In Asia, Japan’s Nikkei 225 fell 1.4 per cent to 47,582.15, tracking US losses. Uncertainty over the choice of a new prime minister has also weighed on investor sentiment. Conservative lawmaker Sanae Takaichi was elected to head the ruling Liberal Democratic Party but last week’s collapse of its coalition with the Buddhist-backed Komeito cast doubt over whether she would garner enough support in the lower house of parliament to prevail in a vote expected next week. Takaichi has led efforts to form a new alliance with the Osaka-based Japan Innovation Party, which would improve her chances of becoming Japan’s first female prime minister.

In Chinese markets, shares fell as trade tensions with Washington intensified. Hong Kong’s Hang Seng index slumped 2.5 per cent to 25,247.10, while the Shanghai Composite index slid nearly 2 per cent to 3,839.76. Traders also remained cautious ahead of Monday’s release of economic data and an important meeting of the ruling Communist Party leadership next week. South Korea’s Kospi closed nearly flat at 3,748.89, erasing earlier gains amid optimism over progress in trade talks with the US. Data released on Friday showed South Korea’s seasonally adjusted unemployment rate slid to 2.5 per cent in September from 2.6 per cent in August. Australia’s S&P/ASX 200 lost 0.8 per cent to 8,995.30, retreating from the previous day’s record high. Energy and tech stocks led the decline. Taiwan’s Taiex dropped nearly 1.3 per cent while in India, the Sensex rose 0.4 per cent.

On Wall Street, stocks fell Thursday as worries flared over the financial health of midsized banks. The S&P 500 slid 0.6 per cent to 6,629.07, in its latest up-and-down day.