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Stocks fall on renewed oil price drop

A renewed slump in oil prices amid a lingering global supply glut hurt US and European stock markets today and weighed on the dollar following a rebound in those sectors late last week.

Anxiety over the impact of tumbling energy prices on global economic growth and central bank policies revived safe-haven demand for the yen, gold and US and German government debt.

Crude oil prices fell as much as 5 percent as Iraq announced record-high oil production that will feed into an already oversupplied market, wiping out much of the oil price gains from of the biggest-ever daily rallies on Friday.

The oil-led market turbulence since the start of 2016 has raised hopes of more stimulus from major global central banks.

Last week, European Central Bank chief Mario Draghi signalled the bank was open to more monetary stimulus to combat weak growth and inflation in the euro zone.

Traders have bet the Federal Reserve would seek to soothe financial markets after its two-day meeting on US monetary policy that will begin on Tuesday.

Global markets slumped at the start of the year on fears that a slowdown in world No. 2 economy China would spread to the rest of the world, and oil prices sank to 13-year lows.

German business confidence deteriorated to an 11-month low in January, a survey showed, suggesting growing concern among company executives in Europe's largest economy.

US interest rates futures implied traders placed a 13 percent chance the Fed will hike rates later this week.

In late US trading, the Dow Jones industrial average was down 85.33 points, or 0.53 percent, to 16,008.18, the S&P 500 was 13.64 points, or 0.72 percent, lower to 1,893.26 and the Nasdaq Composite was down 24.57 points, or 0.54 percent, to 4,566.61.

The pan-European FTSEurofirst 300 index finished down 0.4 percent, while Tokyo's Nikkei ended 0.9 percent higher.

The MSCI all-country World Equity Index fell 0.4 percent to 366.48.

Losses in oil and Wall Street pushed the greenback lower. The dollar index, which tracks the greenback versus a basket of six currencies, slipped 0.2 percent, to 99.363.

The yen edged up 0.25 percent against the dollar at 118.46 yen, and was steady against the euro at 128.40 yen.

Brent crude oil futures was down 5.2 percent to $30.50 a barrel, while US crude dropped 5.8 percent to $30.34.

US 10-year Treasury yields were down 3 basis points at 2.02 percent, and 10-year German Bund yield was down 1 basis point at 0.397 percent, as the fall in oil prices underpinned support for safe-haven debt.

Spot gold rose 0.7 percent to $1,105.40 an ounce.

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Tags:  US  stock market  Europe  Nikkei  





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Edition No. 5055 - This publication is a property of NEFIR S.A. -RNPI Nº 5343955 - Issn 1852 - 9224 - Te. 4349-1500 - San Juan 141 , (C1063ACY) CABA - Director Perdiodístico: Ricardo Daloia