Global stocks extend losses as oil slumps amid resurgent dollar
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.