Global Stocks Fall on Oil Price Weakness
February 02 2016 - 04:40AM
Dow Jones News
Global stocks fell Tuesday amid renewed weakness in oil
prices.
Brent crude oil was down 1.5% at $33.72 a barrel, pressured by
ongoing concerns about oversupply and weak manufacturing data from
China on Monday which rekindled concerns about demand.
The Stoxx Europe 600 fell 0.9% in early trade, with losses
concentrated in the energy sector.
Shares in BP PLC were down 5.8% after the company reported a
sharp loss in the fourth quarter, hit by the slide in oil prices as
well as heavy impairments.
Futures pointed to a 0.6% opening loss for the S&P 500.
Changes in futures do not necessarily reflect market moves after
the opening bell.
While strategists say low oil prices should boost consumer
spending in the long run, steep declines in the oil price have hit
equity markets hard this year as investors fear falling oil might
signal slack in demand from the world's largest energy consumers.
Meanwhile, energy-dependent economies, such as Russia, have
suffered greatly.
The underlying concern is, "Is the decline in oil prices and
economic weakness in China foreshadowing a global recession?" said
David Donabedian, chief investment officer at Atlantic Trust
Private Wealth Management.
While he doesn't believe this is the case, he also doesn't
expect a significant stock rally in the short-term and notes the
perceived recession or stagnation risk in the U.S. has risen.
Earlier, stocks in Asia ended mostly lower. Japan's Nikkei Stock
Average closed down 0.6%, while the S&P ASX 200 fell 1% after
the Reserve Bank of Australia held interest rates steady as
expected.
The Shanghai Composite Index, however, climbed 2.3% after
China's central bank injected more liquidity into the financial
system ahead of the weeklong Lunar New Year holiday.
Tuesday's moves followed a flat finish on Wall Street, as
falling oil prices cut into Friday's gains.
After U.S. markets closed, Alphabet Inc. reported a surge in
profitability at its main Google Internet businesses last year.
Shares gained in after-hours trading, helping Alphabet surpass
Apple Inc. as the most valuable publicly-traded company in the
world.
In other corporate news, UBS Group AG reported a fall in
fourth-quarter net profit. Shares were down 4.7%.
In currencies, the dollar was down 0.2% against the yen at ¥
120.6680, while the euro was flat against the dollar at
$1.0900.
Spot gold in London was down 0.4% at $1,124.95 an ounce.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
February 02, 2016 04:25 ET (09:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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