For Quick Alerts
For Daily Alerts

Stocks Battered As Oil Pushes Below USD 27

By Super

New York, Jan 21 (AFP) Global stocks suffered another rout as US oil prices slid to fresh 12-year lows, heaping further pressure on financial markets from London and Paris to Moscow and Manhattan.

Stocks Battered As Oil Pushes Below USD 27

Asia's main stock indices yesterday fell more than three per cent, as did a number of indices in Europe -- wiping out the previous day's rally spurred by hopes of Chinese stimulus. With a loss of 3.5 per cent, London joined a number of other markets in bear territory -- a fall of more than 20 per cent from a recent peak.

Selling pressure also seized Wall Street much of the day, dumping the Dow as low as 15,450.56, a fall of about 3.5 percent at mid-session. US markets later clawed back some of their losses with a mid-afternoon rally that raised hopes that a bottom had been reached.

Still, the broad-based S&P 500 ended down 1.2 percent, taking its losses for the year to about 9.0 percent. "It's not a pretty sight (on stock markets) with every single sector in the red... only serving to prove that yesterday's bounce was a short-lived relief rally," said Brenda Kelly, head analyst at London Capital Group.

"People are just assuming we're heading for a global recession and that it's something we're going to need to get out in front of," said Sam Stovall, chief investment strategist at S&P Capital IQ in New York.

Driving the selling pressure once again was the sinking price of oil, which ended the day in New York down 6.7 per cent at USD 26.55 a barrel, the lowest level since May 2003.

The oil rout has heavily reverberated in petroleum centers in the Middle East and Russia, where the ruble fell to a record low as the US dollar climbed past 81 rubles for the first time.


Between the plunge in oil prices and lower global growth "investors are having to digest a pretty toxic cocktail of factors that are weighing heavily on sentiment," said Michael Hewson, chief market analyst at CMC Markets UK.

But leading bankers sought to counter the narrative that a global recession is coming. JPMorgan chief executive Jamie Dimon said he is still hoping the stock rout of early 2016 will turn out to be only a "speedy adjustment" that does not signal a major global slowdown.

Dimon noted that lower oil prices benefit some leading economies, such as India and Japan, as well as US consumers -- a view shared at rival bank Goldman Sachs.

"It feels like the degree to which the market is focused on the energy exposure has managed to discount the long-term tailwinds to the consumer in a reduction of costs across the globe," said Goldman Sachs chief financial officer Harvey Schwartz.


Read more about: stocks crude oil oil prices
Company Search
Get Instant News Updates
Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more