World Economy

Oil Slide Weighs on Global Stocks

China shares get long-sought MSCI index listing.China shares get long-sought MSCI index listing.

Global stocks retreated and the yen strengthened after oil tumbled into a bear market on concern a supply glut will persist. Havens including bonds, the yen and gold gained.

European shares fell for a second day as crude continued to edge lower, but for once oil’s woes had little impact in Saudi Arabia, where a palace reshuffle and good news from MSCI Inc. boosted equities. Shanghai stocks also advanced after the index provider added China’s domestic shares to its emerging-markets gauge. The pound erased a decline as the UK prepares for a new parliamentary session under (Prime Minister Theresa) May’s minority government, Bloomberg reported.

New York-based MSCI said it will add 222 China A-share stocks to its developing-nation measure starting in May 2018. The index provider delayed its decision on the status of Argentina’s equities and said it will consult on the possible inclusion of Saudi Arabia in the index.

Stocks: The Stoxx Europe 600 lost 0.7% percent as of 11:27 a.m. in London, with financial shares leading the way. The MSCI Emerging Markets Index slid 0.5%. Saudi Arabia’s Tadawul All-Share Index climbed 3.7%. Contracts on the S&P 500 dropped 0.2%. The gauge’s retreat on Tuesday was led by energy stocks and consumer discretionary producers, which slumped 1.3%.

Commodities: West Texas oil fell 0.5% to $43.32. Futures tumbled more than 2% on Tuesday, touching the lowest since August. Gold rose 0.3% to $1,246.94 an ounce after falling for five straight days.

Currencies: The British pound was little changed at $1.262. The currency lost 0.9% on Tuesday after Bank of England Governor Mark Carney said he is still worried about the impact of Brexit on the economy. The euro climbed 0.1% to $1.1147 after two days of declines. The yen rose 0.3% to 111.15 per dollar, after gaining 0.1% on Tuesday. The Bloomberg Dollar Spot Index was little changed after rising 0.3% on Tuesday and 0.4% the previous day.

Bonds: The yield on 10-year treasuries dropped one basis point to 2.15%, after declining three basis points on Tuesday. The yield on UK benchmark bonds fell two basis points.

Asia: Australia’s S&P/ASX 200 Index slumped 1.6%, erasing its gain for the year, as energy shares tumbled. BHP Billiton Ltd. and Rio Tinto Ltd. slid at least 2.9%. The Shanghai Composite Index finished with a 0.5% gain, after swinging between gains and losses throughout the day following the MSCI decision. Hong Kong’s Hang Seng Index fell 0.6%.


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