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 Market Analyst - UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a Market Analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam