Oil pushes global stocks lower

On Wednesday global stocks retreated and the yen strengthened after oil tumbled into a bear market on concern a supply glut will persist. Havens including bonds, the yen and gold gained.

European shares fell for a second day as crude continued to edge lower, but for once oil’s woes had little impact in Saudi Arabia, where a palace reshuffle and good news from MSCI Inc. boosted equities. Shanghai stocks also advanced after the index provider added China’s domestic shares to its emergingmarkets gauge. The pound erased a decline as the U.K. prepares for a new parliamentary session under Theresa May’s minority government.

The weakness in crude and other commodities threatens to dent arguments from U.S. central bankers that soft inflation rates will be transitory, adding to investor concerns of a Fed policy error that could unintentionally crimp the global economic recovery.

Meanwhile, MSCI said it will add 222 China A-share stocks to its developing-nation measure starting in May 2018. The index provider delayed its decision on the status of Argentina’s equities and said it will consult on the possible inclusion of Saudi Arabia in the index.

The Stoxx Europe 600 lost 0.7 percent as of 11:27 a.m. in London, with financial shares leading the way. The MSCI Emerging Markets Index slid 0.5 percent. Saudi Arabia’s Tadawul All-Share Index climbed 3.7 percent.

The British pound was little changed at $1.2625. The currency lost 0.9 percent on Tuesday after Bank of England Governor Mark Carney said he is still worried about the impact of Brexit on the economy. The euro climbed 0.1 percent to $1.1147 after two days of declines.

West Texas oil fell 0.5 percent to $43.32. Futures tumbled more than 2 percent on Tuesday, touching the lowest since August. Gold rose 0.3 percent to $1,246.94 an ounce after falling for five straight days.