Global stocks ex­tend losses as oil slumps amid resur­gent dol­lar

The Pak Banker - - MARKETS/SPORTS -

Global stocks were set for their first back-to-back de­clines in a month as crude oil ex­tended its slide be­low $40 a bar­rel and prospects for a U.S. in­ter­est-rate in­crease spurred de­mand for dol­lars.

Euro­pean shares re­treated for a fourth day, while raw-ma­te­ri­als pro­duc­ers led de­clines among Asian eq­ui­ties as the Bloomberg Com­mod­ity Index slumped for a sec­ond day. Crude dropped af­ter data showed a big­ger-than-ex­pected in­crease in U.S. stock­piles, and iron ore fell for a third day. The dol­lar strength­ened against all 16 ma­jor peers, while Malaysia's ring­git led losses among emerg­ing-mar­ket cur­ren­cies. Gov­ern­ment bonds ad­vanced in Aus­tralia and the euro area.

Af­ter last week halv­ing its pro­jec­tion for in­ter­est-rate rises this year to two -- a shift that spurred global stock gains and de­pressed the dol­lar -- the Fed­eral Re­serve re­mains in the spot­light as its own of­fi­cials talk up the pos­si­bil­ity of an in­crease. Fed Bank of St. Louis Pres­i­dent James Bullard on Wed­nes­day joined a cho­rus of pol­icy mak­ers float­ing the pos­si­bil­ity of a rate hike as soon as April, help­ing fuel a re­bound in the green­back that's un­set­tling the mostly dol­lar-de­nom­i­nated com­mod­ity mar­ket.

"Fed of­fi­cials this week re­minded the mar­ket that they still want to move for­ward with the rate hikes," said Mark Lis­ter, head of pri­vate wealth re­search at Craigs In­vest­ment Part­ners Ltd. in Welling­ton, where he helps man­age about $7.2 bil­lion. "In­vestors have been look­ing for a rea­son to pull back and this is one."

Chi­nese Premier Li Ke­qiang re­it­er­ated Thurs­day that growth is the top pri­or­ity in the world's sec­ond-big­gest econ­omy and mea­sures can be in­tro­duced if needed to en­sure the gov­ern­ment's tar­get is met. The U.K. is due to re­lease re­tail sales data, Italy will re­port in­dus­trial or­ders fig­ures and Tai­wan's cen­tral bank is forecast to lower in­ter­est rates for the third quar­terly pol­icy meet­ing in a row. Fi­nan­cial mar­kets across most of Asia, Europe and North Amer­ica will be closed on Fri­day for hol­i­days.

The MSCI All Coun­try World Index fell 0.5 per­cent as of 8:12 a.m. in Lon­don, af­ter slid­ing 0.8 per­cent on Wed­nes­day. The Stoxx Europe 600 Index slid 0.8 per­cent, the MSCI Asia Pa­cific Index lost 1.1 per­cent and futures on the Stan­dard & Poor's 500 Index de­clined 0.3 per­cent. Bench­marks dropped by about 1 per­cent in the U.K. and France, while larger de­clines were recorded in Hong Kong and Shang­hai.

China Life In­surance Co., the na­tion's largest in­surer, dropped 3.9 per­cent in Hong Kong af­ter re­port­ing earn­ings that fell short of an­a­lyst es­ti­mates. PetroChina Co., the coun­try's big­gest oil and gas pro­ducer, slumped 4.3 per­cent af­ter re­port­ing its lowest an­nual profit since 1999. Mit­sui & Co. dropped 7.5 per­cent in Tokyo af­ter the trad­ing com­pany forecast its first loss since it was founded in its mod­ern form in 1947.

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