Deutsche Bank drops further as Merkel gives no sign of help

Germany's biggest bank Deutsche (DBKGn.DE) has seen its value halve this year amid worries it will have to raise fresh capital to pay for a string of heavy fines, including one of up to $14 billion (£10.78 billion) from the US, and offset a sharp fall in its revenues.

The slide, alongside a grilling of Wells Fargo's chief executive by USA lawmakers amid a call for the bank to be broken down due to a scandal over its opening of client accounts without agreement, weighed heavily on bank stocks.

CEO John Cryan said Deutsche Asset Management, which held Abby Life, would continue to focus on its core businesses "while this transaction will also strengthen Deutsche Bank's capital position". The major oil powers are meeting this week in Algiers to discuss the global supply glut that will likely last well into next year.

This helped push the pan-European STOXX 600 index up 0.9 percent, with an index of banks up 1.3 percent.SX7P.

Concerns over the bank's health have grown after it emerged USA authorities were seeking $14 billion to settle legal claims over the bank's sales of mortgage-backed securities. He said cheap money was stopping countries from implementing reforms.

He said the OPEC deal was preventing the equity market from a meltdown.

USA crude was up 5.2 percent on the day.

The Dow Jones industrial average was up 34.11 points, or 0.19 percent, at 18,262.41, the S&P 500 was up 3.47 points, or 0.16 percent, at 2,163.4 and the Nasdaq composite was up 6.41 points, or 0.12 percent, at 5,312.12.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.1 percent.

CURRENCY: The euro was up 0.1 percent at $1.1224 while the dollar rose 0.4 percent to 106.64 yen. Nikkei futures fell 0.1 percent.

Brent crude, the worldwide benchmark, last traded at $46.08 a barrel, up 11 cents on the day on data showing a surprise drawdown in USA inventories.

The safe-haven Japanese yen fell as much as 1.2 percent versus the USA dollar, but cut its losses by more than half as stocks sold off late in the US session. Germany sold a tranche of the bonds at a record low yield at auction of minus 0.7 percent.

However, U.S. yields remain trapped in tight ranges and could resume their recent downtrend given geopolitical tensions and political uncertainty, analysts said.

Schelling also said euro zone governments like his should play a stronger supporting role in reviving the region's fortunes alongside the European Central Bank's more than 1.5 trillion euro stimulus programme.

It comes as the troubled lender has shaken markets to their core this week. "The oscillations of five to 10 basis points are not that significant because if you look at the 10-year chart over the last three months, we're still trading in a narrow range".

In Paris, Societe Generale declined 1.05 percent and Credit Agricole weakened by 1.05 percent.

Economists had forecast the growth rate to improve to 4.9 percent from July's initially estimated 4.8 percent rise.