SHARES fell on Friday in Europe and Asia as worries over turmoil in the banking sector and recession risks overshadowed gains on Wall Street. Benchmarks declined in most major markets, while US futures were higher. Oil prices fell. Investors are worried that more banks might suffer a debilitating exodus of customers following the second- and third-largest US bank failures in history.
That turmoil is clouding the outlook for what the Federal Reserve will do with interest rates after hiking them to market-rattling heights over the last year. The fear is that all the turmoil in the banking industry could cause a sharp pullback in lending to small and midsized businesses around the country. That could put more pressure on the economy, raising the risk for a recession that many economists already saw as likely. Germany’s DAX lost 1 per cent to 15,055.96 and the CAC 40 in Paris also fell 1per cent, to 7,065.83. Britain’s FTSE 100 declined 1.1 per cent to 7,418.52. The future for the S and P 500 was up 0.1per cent while that for the Dow industrials was unchanged.