A roundup of trading on major world markets:
NEW YORK – Wall Street has fallen as energy and raw material stocks take a hit, with oil prices falling to their lowest in nearly seven years.
Brent crude and US crude extended their decline and fell as much as five per cent, after OPEC’s meeting last week failed to address a growing supply glut.
The US dollar rose for a second day and was up 0.3 per cent at 98.66 against a basket of major currencies.
At 12.42pm ET (0442 Tuesday AEDT) the Dow Jones industrial average was down 175.32 points, or 0.98 per cent, at 17,672.31, the S&P 500 was down 21.17 points, or 1.01 per cent, at 2,070.52 and the Nasdaq Composite was down 48.17 points, or 0.94 per cent, at 5,094.10.
Eight of the 10 major S&P sectors were lower, with the energy index falling 4.1 per cent, putting it on track for its biggest single-day decline since the end of August.
Falling oil prices helped airline stocks, with JetBlue Airways up 4.1 per cent and Republic Airways up 2.9 per cent. The S&P 1500 airlines index hit its highest level since January.
Inaccurate forecasts of growth, employment and inflation by the Fed have pulled the central bank in conflicting directions and driven the decision to keep rates low for so long, St Louis Federal Reserve President James Bullard said.
Traders see a 79 per cent chance that the central bank will increase rates for the first time in nearly a decade, according to the CME Group’s FedWatch.
LONDON – Britain’s top share index has surrendered its earlier gains to end lower, with commodity shares coming under severe pressure after prices of crude oil and metals slipped.
The UK Oil and Gas and the mining indexes fell 4.0 per cent and 1.7 per cent respectively after crude oil prices hit their lowest in nearly seven years following an OPEC meeting that ended in disagreement over production cuts and as metals prices fell on a stronger US dollar.
Shares in Royal Dutch Shell, BG Group, BP, BHP Billiton and Antofagasta fell by between 2.8 per cent and 4.7 per cent.
“OPEC seems to be fragmenting now, with an air of ‘every member for itself’ prevailing,” said Mike van Dulken, head of research at Accendo Markets.
“Without the protection of big producers like Saudi Arabia, smaller exporters will have little choice but to ramp up production, even if to do so would be counter-productive for the oil price.”
The blue-chip FTSE 100 index closed 0.2 per cent lower at 6,223.52 points after hitting a high of 6,287.23 points earlier in the day. It shed 2.8 per cent in the last two sessions of last week, which took the index to its lowest level since mid-November.
HONG KONG – Asian shares edged lower as investors kept a weather eye on Chinese economic data due late this week that is expected to show the world’s second-largest economy is still sluggish.
Asian investors were worrying about Chinese trade data due on Tuesday, inflation the following day and industrial output and retail sales figures due on Saturday.
MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.3 per cent. Japan’s Nikkei closed one per cent higher, thanks to a weaker yen, having lost 2.2 per cent on Friday.
In China, the CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.3 per cent, as did the Shanghai Composite.
European Central Bank President Mario Draghi, in a speech in New York on Friday, said more stimulus could be deployed if necessary.
“Draghi’s correctively dovish speech emphasised that the ECB can do more, attempting to put the ECB decision in a broader easing context,” Mizuho’s head of euro rates strategy Peter Chatwell, said in a note to clients.
WELLINGTON – The S&P/NZX 50 index dropped 30.4 points, or 0.5 per cent, to 6064.42.
