European Stocks Drop as Bank Shares Flip Lower After Stress Tests

European stocks declined on Monday, with bank shares losing steam following stress-test results for the industry, and as an update on eurozone manufacturing activity showed further slowing.

The Stoxx Europe 600 dropped 0.6% to close at 339.86, with banks leading decliners after stress-test results out on Friday.

Gains in bank shares ahead of the test results led to the Stoxx 600 closing up 0.7% on Friday.

Source : Market Watch

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Equities Fall in Tokyo as Investors Await Bank of Japan Review

Stocks fell in Tokyo for the first time in four days ahead of a Bank of Japan monetary policy review in which it’s expected to keep stimulus unchanged.

The Topix index declined 0.3 percent to 1,376.38 at 9:26 a.m. in Tokyo, after closing Monday at a one-month high. The gauge posted its first weekly decline in four weeks last week, after jumping 15 percent over the preceding three weeks. The Nikkei 225 Stock Average retreated 0.1 percent to 17,210.43 on Tuesday. The BOJ concludes a two-day meeting Tuesday, to be followed by a policy decision from the Federal Reserve on Wednesday.

Banks were the biggest drag among on the Topix, with Mitsubishi UFJ Financial Group Inc. falling 1.6 percent. Bando Chemical Industries Ltd. rose 3.9 percent after announcing it will buy back as much as 2.1 percent of its shares, while Kandenko Co. declined 5.5 percent after saying it will sell 20 billion yen ($ 176 million) in convertible bonds.

Thirty-five of 40 economists surveyed by Bloomberg forecast the BOJ will keep policy unchanged Tuesday, with most expecting the bank’s board to wait before approving more monetary stimulus. Governor Haruhiko Kuroda surprised markets with his Jan. 29 decision to introduce negative interest rates.

The BOJ’s and Fed reviews come as investors start to question the potency of central bank intervention. Japan’s surprise shift into negative rates and last week’s unprecedented stimulus move from the European Central Bank have received a mixed reception in markets as concern over a potential global slowdown and the impact of falling oil prices unnerves traders. Global equities have staged a cautious comeback since reaching a 2 1/2-year low mid-February, as the prospect of a production freeze steadied oil prices and commodities.

Source: Bloomberg