The World Stocks has ended its gains of past three days and started to splutter as lackluster global economic indicators led to a further slump in oil prices. The Dollar fell by a whisker down to 120.85 yen from 120.96 yen Monday in NY. The gloom was evident everywhere with Santos losing 4.3%, Oil Search down 2.8% and Woodside Petroleum lower by 3.3%.
The problem was further confounded by the disappointing fourth quarter GDP data. Investors are doing the waiting game awaiting US personal income and spending, construction spending and manufacturing PMI numbers before they park their green bills.
Japan’s Nikkei was upbeat after two straight days of profits and big gains after Bank of Japan’s move to introduce negative interest rates late last week. However, Nikkei ended down 0.6 percent.
The world economy continued to bleed with China being at the epicenter of this situation. Manufacturing is at its lowest since mid-2012 and the only light in an otherwise bleak scenario are big Whigs of high-tech trade such as South Korea and Taiwan. Dow Jones industrial average also fell by 17.2 points and fell by 150 points to stand at 16,449.18.
Oil prices are again spluttering and fell by as much as 7% on Monday, and the glum mood transcended the markets as European shares fell following Asia deep into the red. BP has suffered its biggest losses in 20 years and plans to slash thousands of jobs, and there is worse to come- rating cuts by S&P for Shell and BHP. No wonder Britain’s FTSE 100, Germany’s DAX and France’s CAC 40 were down 1.4-1.7 percent.
Banks have also been hit with Swiss Bank UBS falling by as much as 8% as it becomes evident that wealthy clients are pulling their money out. Australian Dollar has also fell after the nation’s Central Bank held rates but has indicated that it could ease the rates after the surprise move by Japan into negative interest rates.