Africa-Press – Kenya. Global markets declined as the US federal government shutdown entered its 17th day and fears over the banking sector intensified following fraud-related loan losses at several national banks.
National banks Zions Bancorp and Western Alliance announced fraud in some loans, triggering concerns over their loan portfolios.
Zions Bancorp said it discovered irregularities in two commercial loans and reported a $50 million loss to the US Securities and Exchange Commission (SEC), sending its shares down 13.1% on Thursday. Western Alliance lost 10.8% after filing a lawsuit against a borrower for fraud, according to its SEC filing.
The KBW Regional Banking Index fell 6.3% on Thursday, while shares of JPMorgan Chase and Jefferies Financial Group dropped 2.3% and 10.6%, respectively. The sell-off weighed heavily on investor sentiment and broader markets.
The CBOE Volatility Index (VIX), known as the fear gauge, surged 23% to 25.31, its highest level in six months. Analysts said the rise was fueled not only by banking concerns but also by renewed US–China trade tensions, as President Donald Trump threatened new tariffs after Beijing restricted rare earth exports. Additionally the ongoing federal government shutdown, fueled risks.
Gold hit a record $4,379.42 per ounce before easing to $4,366, up 0.95% on Friday. The US 10-year Treasury yield fell to its lowest level since April 7, settling at 3.96%, amid strong buying. The US Dollar Index extended its four-day slide, down 0.1% to 98.2.
The S&P 500 lost 0.63%, the Nasdaq 0.47%, and the Dow Jones Industrial Average 0.65% on Thursday, with American futures pointing lower on Friday.
European markets rose Thursday after Trump said delegations from Russia and Ukraine would meet next week to discuss ending the war and that he would hold talks with Russian President Vladimir Putin in Budapest. A US delegation led by Secretary of State Marco Rubio is also expected to meet Russian counterparts.
Analysts said optimism over potential peace talks buoyed European markets, while the EU’s continued financial support for Ukraine remained a key driver of bloc spending.
In France, Prime Minister Sebastien Lecornu’s new government survived two no-confidence votes Thursday, both falling well short of the 289 votes needed to topple it.
As for corporate developments, Swiss food and beverage company Nestle reported a 3.3% year-on-year sales increase but noted declining sales in China. The company said it would lay off 16,000 employees over two years to cut costs, including 12,000 white-collar positions and 4,000 manufacturing and supply chain roles.
Following those developments, France’s CAC 40 rose 3.42%, Italy’s FTSE MIB 30 gained 1.12%, Britain’s FTSE 100 added 0.12%, and Germany’s DAX 40 advanced 0.38%. European futures, however, opened lower on Friday.
In Asia, a negative trend emerged due to US-China trade tensions and a sell-off in American futures, led by the banking and finance sector.
Bank of Japan Governor Kazuo Ueda said Friday that the central bank would assess global and domestic data, including those gathered during his Washington visit, before deciding monetary policy in October.
He noted that the BoJ will raise rates if the probability of its growth and price estimates increases, adding that while the US economy showed resilience, the impact of tariffs would likely become more visible in the coming months.
Japan’s Nikkei 225 fell 1.4%, China’s Shanghai Composite Index declined 1.1%, Hong Kong’s Hang Seng Index dropped 1.8%, and South Korea’s Kospi Index traded flat near the close.
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