Most Asian stock market indices were trading lower on Wednesday (28 September), with the Shanghai Composite down 0.25% at 2,990.73 as of 6.08am GMT. This was despite a positive Wall Street close overnight.
Investors in the region are said to be concerned with the European banking sector. This was sparked after shares of Germany's Deutsche Bank touched record lows overnight.
Shares of Germany's largest lender started declining after speculation that the bank was seeking aid from the German government amid a regulatory dispute with the US. The bank has, however, denied these rumours. Deutsche Bank had been ordered to pay $14bn (£10.76bn) by the US Department of Justice to settle allegations it mis-sold mortgage securities in the run-up to the 2008 financial crisis.
The bearish trend also follows former UK chancellor Lord Norman Lamont warning that struggling German banks pose the biggest threat to the European Union. He has said that the EU is at risk of buckling under the weight of distressed lenders, not only in peripheral countries such as Italy but also its powerhouse economy, Germany.
According to Reuters, the focus of investors going forward would be on comments from European Central Bank (ECB) president Mario Draghi and US Fed chairperson Janet Yellen. While Draghi is expected to answer questions from German lawmakers later in the day about the central bank's monetary policy, Yellen is expected to give a semi-annual testimony before the US House Financial Services Committee.
Indices in the region were trading as follows at 6.31am GMT:
|Hong Kong||Hang Seng Index||23,452.19||Down||0.51%|
Overnight (27 September), the FTSE 100 closed 0.15% lower at 6,807.67, while the Dow Jones Industrial Average closed higher by 0.74% at 18,228.30.
Among commodities, oil prices were trading in the green. While WTI crude oil was trading higher by 0.16% at $44.74 a barrel, Brent crude was trading 0.37% higher at $46.14 a barrel as of 6.39am GMT.