Global fall as brief oil rally fades

The Pak Banker - - MARKETS/SPORTS -

Global stocks fell Mon­day, re­vers­ing early gains, as a brief rally in oil prices faded. Stock fu­tures pointed to a 1% open­ing loss for the S&P 500. Changes in fu­tures don't nec­es­sar­ily re­flect mar­ket moves af­ter the open­ing bell. The Stoxx Europe 600 was down 2.1% mid­morn­ing af­ter start­ing the day higher.

"Sell­ing on the bounces, how­ever brief, con­tin­ues," said Chris Beauchamp, mar­ket an­a­lyst at IG, adding "peo­ple still seem keen to off­load risk at any price." Losses were heav­i­est in the tech­nol­ogy sec­tor, fol­low­ing a down­beat fin­ish on Wall Street. A dive in tech­nol­ogy shares and a mixed jobs re­port added to un­cer­tainty about the U.S. econ­omy on Fri­day, send­ing stocks lower across the board.

Job cre­ation slowed in Jan­uary af­ter three con­sec­u­tive months of gains, data showed, but a slight fall in un­em­ploy­ment and a mod­est uptick in wages left the prospect of fur­ther U.S. in­ter­est rate in­creases this year on the ta­ble.

Mean­while, Brent crude oil re­versed early gains Mon­day to fall 0.8% at $33.78 a bar­rel, weigh­ing on sen­ti­ment. While fall­ing oil prices ben­e­fit con­sumers, a rise or sta­bi­liza­tion in oil prices "would al­le­vi­ate strains from the global fi­nan­cial sys­tem," said Mark Hep­pen­stall, chief in­vest­ment of­fi­cer at Penn Mu­tual As­set Man­age­ment, which man­ages $20 bil­lion in as­sets. Brent crude prices are down over 9% this year amid a con­tin­u­ing sup­ply glut and fears over slow­ing global growth. "A lot of emerg­ing mar­ket economies have rev­enues de­pen­dent on oil and com­modi­ties and debt de­nom­i­nated in U.S. dol­lars-that mix has proven pretty toxic," he added. Saudi oil min­is­ter Ali al-Naimi met with his Venezue­lan coun­ter­part on Sun­day but didn't an­nounce any plans for a pro­duc­tion cut.

In Asian trade, Ja­pan's Nikkei Stock Av­er­age gained 1.1% as the yen fell against the dol­lar, while Aus­tralia's S&P ASX 200 ended flat. Other mar­kets in Asia were closed for the Lu­nar New Year Hol­i­day, but China re­mained in fo­cus for global in­vestors. Data re­leased over the week­end showed China's for­eignex­change re­serves fell to their low­est level in over three years, though many an­a­lysts had ex­pected an even larger drop.The lat­est re­serves data added to con­cerns that China may be forced to fur­ther weaken its cur­rency.

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