World shares retreat after worries over bank lending pull Wall Street
lower
[October 17, 2025] By
TERESA CEROJANO
MANILA, Philippines (AP) — World shares skidded Friday following a
retreat on Wall Street driven by concerns over banks’ loan portfolios.
The future for S&P 500 fell 1.3% while that for the Dow Jones Industrial
Average shed 1%. 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% to 23,783.64.
Britain's FTSE 100 fell 1.5% to 9,293.24 while in Paris, the CAC 40 shed
nearly 0.8% to 8,126.52.
In Asia, Japan's Nikkei 225 fell 1.4% to 47,582.15, tracking U.S.
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% to 25,247.10,
while the Shanghai Composite index slid nearly 2% 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 U.S.
Data released on Friday showed South Korea’s seasonally adjusted
unemployment rate slid to 2.5% in September from 2.6% in August.
Australia's S&P/ASX 200 lost 0.8% 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% while in India, the Sensex rose 0.4%.
On Wall Street, stocks fell Thursday as worries flared over the
financial health of midsized banks.
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A woman with an umbrella passes the New York Stock Exchange, Monday,
Oct. 13, 2025. (AP Photo/Richard Drew)
 The S&P 500 slid 0.6% to 6,629.07,
in its latest up-and-down day. The Dow Jones Industrial Average
dropped 0.7% to 45,952.24, and the Nasdaq composite lost 0.5% to
22,562.54.
Salt Lake City-based Zions Bancorp. tumbled 13.1% after the bank
said its profit for the third quarter will take a hit because of a
$50 million charge-off related to loans made to a pair of borrowers.
Zions said it found “apparent misrepresentations and contractual
defaults” by the borrowers and several people who guaranteed the
loans, along with other irregularities.
Another bank, Western Alliance Bancorp, dropped 10.8% after saying
it has sued a borrower, alleging fraud. It also said it’s standing
by its financial forecasts given for 2025.
Scrutiny is rising on the quality of loans that banks and other
lenders have broadly made following last month’s Chapter 11
bankruptcy protection filing of First Brands Group, a supplier of
aftermarket auto parts. The question is whether the hiccups are just
a collection of one-offs or a signal of something larger threatening
the industry.
“The Street’s been dining on rate cut and AI optimism for months,
but this week the waiter brought something no one ordered: the
return of the credit bogeyman,” Stephen Innes of SPI Asset
Management said in a commentary.
“Regional banks have become the canaries in the credit coal mine,
and their chirping sounds suspiciously weak,” he said.
U.S. companies broadly are under pressure to deliver stronger
profits after the S&P 500 surged 35% from a low in April. To justify
those gains, which critics say made their stock prices too
expensive, companies will need to show they’re making much more in
profit and will continue to do so.
In other dealings on Friday, benchmark crude oil lost 61 cents to
$56.85 per barrel. Brent crude, the international standard, gave up
64 cents to $60.42 per barrel.
The U.S. dollar fell to 149.70 Japanese yen from 150.44 yen. The
euro rose to $1.1703 from $1.1688.
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