WPL Woodside Petroleum Limited

Declines in financial and commodities stocks sent Asian share markets broadly lower Tuesday, as markets eyed the first U.S. presidential debate for hints of future economic policy.

The Nikkei Stock Average slipped 0.4%, the S&P/ASX 200 was down 0.7%, and Korea's Kospi was down 0.1%.

Banks, insurers and other financial stocks in Japan opened lower, following a global fall in the sector overnight as concerns intensified over the health of Deutsche Bank AG, after its shares slid 7.5% Monday to their lowest in decades.

At the center of concerns about Deutsche Bank, a linchpin of Europe's financial system, is the question of whether the lender will need to raise capital to fortify its increasingly precarious finances, though the bank said Monday it was "fundamentally strong."

"It's the banking sector in Europe that triggered all this movement and selloff in equities ... then you saw [a shift to] risk-off mode," said Tareck Horchani, deputy head of Asian Pacific sales trading at Saxo Capital Markets Pte.

Like their European peers, Japanese financial firms are struggling with the ultra-low interest rate environment.

Japan's Topix bank index was recently down 3.8%. Among individual stocks, Mitsubishi UFJ Financial Group lost 3.3% and Sumitomo Mitsui Financial Group declined 2.8%.

The release of the minutes of the Bank of Japan's most recent meeting also provoked investor jitters, as the board's caution about expanding the BOJ's stock-fund buying could add to speculation that the central bank is now more hesitant to dramatically ease policy.

More broadly, investors in Asia were keeping an eye on the first U.S. presidential debate between Hillary Clinton and Donald Trump that could trigger market volatility. Nonetheless, stocks in Greater China have largely held up, bucking the region's losses and recovering from Monday's declines.

Hong Kong's Hang Seng Index was last up 0.5%, while the Shanghai Composite Index was up 0.1%.

Investors have also been tracking the Mexican peso, last up 1% against the dollar, and the Canadian dollar, flat, given the ramifications on the Mexican and Canadian economies if Mr. Trump does well in the debate, said Chris Weston, chief market strategist at IG Markets, in a note.

The peso's rise likely indicated that the market saw Mrs. Clinton performing better than Mr. Trump, Mr. Weston said.

Elsewhere, a slide in oil prices pressured stocks in commodity-reliant economies after Iran said it expects Wednesday's meeting of the Organization of the Petroleum Exporting Countries will be merely "consultative," and vowed to keep pumping until output reaches pre-sanction levels.

Among stock markets with a significant focus on energy, the FTSE Bursa Malaysia was down 0.3% and Singapore's Strait Times Index was down 0.3%. In Australia, Woodside Petroleum shares were down 1.8% and Santos Ltd. fell 0.8%. Brent crude, the global oil benchmark, declined 0.6% to $47.06 a barrel in early Asian trade.

Kosaku Narioka, Jenny W. Hsu, Takashi Nakamichi and Gregor Stuart Hunter contributed to this article.

Write to Ese Erheriene at ese.erheriene@wsj.com

(END) Dow Jones Newswires

September 26, 2016 23:15 ET (03:15 GMT)

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