Oil Slide Extends as Gold Rises, Stocks Mixed: Markets Wrap – Bloomberg

This post was originally published on this site

Oil’s deepening slump continued to weigh on energy shares, dragging American stocks lower and setting up a mixed start to the Asian equity-trading session.

Brent crude slid beneath $45 a barrel to join West Texas Intermediate in a bear market as stockpiles in America remain above seasonal averages and Libya resumed some production. Futures on Japanese stocks indicated a flat start, while Australian and Hong Kong equity-index contracts climbed. The New Zealand dollar rose after the nation’s central bank maintained its neutral policy stance. Saudi Arabian stocks jumped the most in two years after King Salman made his son next in line to the throne of the world’s biggest oil exporter.

Mark Mobius discusses emerging-market valuations.

Source: Bloomberg

The oil rout is raising the chance that inflation will be harder to come by, adding to concerns at the world’s most influential central banks. The weakness in crude and other commodities dents arguments from U.S. Federal Reserve officials that weak inflation rates will be transitory, even as the economy shows few signs of distress. More reaction from policy makers may come from Jerome Powell, James Bullard and Loretta Mester who are all due to speak this week.

Read our Markets Live blog here.

Here are the main market moves:

Commodities

  • Brent crude entered a bear market Wednesday, plunging below $45 a barrel for the first time since November as skepticism that a supply glut will ease worsens. The world benchmark fell 2.7 percent, down 22 percent from its January peak.
  • West Texas oil added 0.2 percent in early trading after losing 2.3 percent to $42.53 on Wednesday.

Stocks

  • Futures on the S&P 500 Index dropped 0.1 percent. The underlying gauge fell 0.1 percent in New York, with Exxon Mobil Corp. and Chevron Corp. contributing the most to the decline.
  • The Nasdaq 100 Index climbed 1 percent, continuing its rebound from a two-week selloff. It’s still 1.8 percent away from its June 8 high.
  • Saudi Arabian equities jumped amid a palace reshuffle. Chinese shares rose after winning entry into MSCI Inc.’s emerging-markets gauge.

Currencies

  • The pound grabbed the center of the G-10 currency stage on Wednesday after remarks from Bank of England Chief Economist Andy Haldane contrasted sharply with the tone set by the bank’s Governor Mark Carney just the day before. Sterling climbed 0.3 percent and traded early Thursday at $1.2674.
  • The Bloomberg Dollar Spot Index fell 0.1 percent after rising 0.3 percent on Tuesday and 0.4 percent the previous day. The yen was little changed at 111.38 per dollar. 

Bonds

  • The yield on 10-year Treasuries was virtually unchanged at 2.16 percent.