By Sarah Jones
April 28 (Bloomberg) -- European and U.S. stock-index futures retreated and Asian shares declined amid concern that Bank of America Corp. and Citigroup Inc. will need more capital.
Barclays Plc and Credit Suisse Group AG may follow their U.S.-traded securities lower after the Wall Street Journal reported that Bank of America and Citigroup were told by regulators they will need to raise more capital following stress tests. Deutsche Bank AG might be active after posting earnings that beat analysts’ estimates. Total SA may lead energy shares lower after crude oil tumbled below $50 a barrel on speculation the swine-flu outbreak will curtail travel.
Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, dropped 2 percent to 2,218 at 7:17 a.m. in London. The U.K.’s FTSE 100 Index is set to open 52 points lower, according to CMC Markets.
“It’s very important to remember that we are still in a bear market and still have quite a lot of problems ahead of us,” said Philippe Gijsels, a senior structured equity strategist at Fortis Global Markets in Brussels. “Most of the banks have to pass the stress test because otherwise it will create a lot of anxiety in the market,” he said in a Bloomberg Television interview.
The MSCI Asia Pacific Index fell 1.9 percent, while futures on the Standard & Poor’s 500 Index declined 1.4 percent, indicating the benchmark index for U.S. equities may extend yesterday’s 1 percent retreat.
U.S. stocks dropped yesterday as concern the swine-flu outbreak will hurt travel, leisure and energy companies overshadowed gains in health-care shares.
Earnings Reports, Banks
Futures suggested that Europe’s Dow Jones Stoxx 600 Index will extend its 2009 drop of 0.9 percent. The regional gauge has rebounded 24 percent since March 9 as companies from American Express Co. and Ford Motor Co. to Italy’s Eni SpA posted earnings that beat analysts’ estimates.
American depositary receipts of Barclays, the U.K.’s third- largest bank, fell 1.8 percent from the London close, while ADRs of Credit Suisse, Switzerland’s biggest bank by market value, retreated 2.6 percent.
Bank of America’s shortfall comes to billions of dollars, the Journal said, while Wells Fargo & Co., Fifth Third Bancorp and Regions Financial Corp. are also likely to need more capital, according to the newspaper.
Stress Tests
Bank of America and Citigroup both plan to mount a detailed rebuttal to the Federal Reserve’s preliminary report following the tests conducted on 19 large financial companies, and Bank of America may appeal today, the Journal said.
Richard Tesvich, a spokesman for Citigroup in Hong Kong, declined to comment when contacted by Bloomberg News. Wells Fargo declined to comment, and representatives of Regions and Fifth Third didn’t respond to requests made late in the day, the newspaper said.
Deutsche Bank might move after Germany’s largest bank returned to profit in the first quarter as a recovery in credit markets led to a rebound in trading.
Net income was 1.19 billion euros ($1.55 billion), compared with a loss of 131 million euros a year earlier. The median estimate of 13 analysts surveyed by Bloomberg called for a profit of 773 million euros. Chief Executive Officer Josef Ackermann also agreed to extend his contract by three years.
Total and Royal Dutch Shell Plc may fall. Crude declined for a second day as the World Health Organization raised its global pandemic alert to the highest since the warning system was adopted in 2005, saying the disease is not containable.
Crude oil for June delivery fell as much as 1.7 percent to $49.27 a barrel in after-hours electronic trading on the New York Mercantile Exchange.
Air Liquide SA may fall after the world’s biggest maker of industrial gases cut its forecast for full-year sales and net income after first-quarter revenue declined.
Sales and earnings this year will be close to 2008 levels, the company said. It had earlier predicted growth in both measures.
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
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