Oil Rebound Fizzles, Sending Global Shares Lower

Global stock markets fell on Wednesday as oil prices slumped back towards 11-year lows, sapping investors’ appetite for risky assets and hurting the shares of mining and energy companies.

Stock markets rallied the previous day as oil prices rebounded on prospects for lower temperatures on both sides of the Atlantic. But on Wednesday benchmark Brent crude slid back below $37 a barrel, with investors worried about slowing demand and high supplies. [O/R]

The fall in oil prices has been a major driver of financial markets this year, hammering energy companies, lowering inflation expectations and reinforcing bets on loose monetary policy in Europe and a slow tightening in the United States.

The pan-European FTSEurofirst 300 index fell 0.5 percent, while the euro zone’s blue-chip Euro STOXX 50 index declined by 0.6 percent, having both gained in the previous session.

Asian shares unwound earlier gains, with continued weakness in Chinese stocks. MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.1 percent, on track for a flat monthly performance and down 12 percent for the year.

Reuters

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.