Global stocks slide for 2nd day after oil decline
BEIJING (AP) – Global stocks slid for a second day Thursday after a fall in oil prices dragged Wall Street lower and a U.S. Federal Reserve official argued for a possible interest rate hike.
KEEPING SCORE: In early trading, France’s CAC-40 fell 1 percent to 4,380.69 points and Germany’s DAX shed 0.8 percent to 9,944.88. Britain’s FTSE 100 lost 1 percent to 6,134.82. Wall Street looked set for more losses, with futures for the Dow Jones industrial average and Standard & Poor’s 500 index off 0.9 percent and 0.3 percent.
ASIA’S DAY: The Shanghai Composite Index tumbled 1.6 percent to 2,960.97 and Hong Kong’s Hang Seng retreated 1.3 percent to 20,345.61. Sydney’s S&P ASX 200 fell 1.1 percent to 5,085.60 and Seoul’s Kospi was off 0.5 percent at 1,985.97. Tokyo’s Nikkei 225 shed 0.6 percent to 16,892.33 and benchmarks in Taiwan, Singapore, Jakarta and Bangkok also fell. Indian markets were closed for a holiday. New Zealand advanced.
U.S. INTEREST RATES: Traders reconsidered risk levels after a member of the Federal Reserve’s rate-setting team was quoted as saying it should consider raising interest rates at its next meeting. James Bullard, president of the St. Louis Federal Reserve Bank, pointed to a broadly unchanged economic outlook and said a case could be made for action next month if the next round of jobs data exceeds official targets.
ANALYST’S TAKE: “Clear messaging from U.S. Federal Reserve board members that U.S. interest rates will rise faster than current market expectations has forced the U.S. dollar higher. Shares fell in a re-pricing of interest rate risk,” said Michael McCarthy of CMC Markets in a report. “Gold slumped and industrial commodities tanked after a higher than expected weekly build in oil stocks.”
OIL: Overnight, the U.S. Energy Information Administration reported that crude stockpiles rose 9.4 million barrels last week in further confirmation of substantial supplies. That helped to pull benchmark U.S. crude below $40.
ENERGY: Benchmark U.S. crude shed 45 cents to $39.34 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $1.66 on Wednesday to close below $40 at $39.79. Brent crude, used to price international oils, fell 32 cents to $40.15 in London. It lost $1.32 in the previous session to $40.47.
CURRENCY: The dollar gained to 112.88 yen from Wednesday’s 112.44. The euro edged down to $1.1173 from $1.1181.