Shares slump as oil prices tumble to new lowsComments
Wednesday was another disastrous day for the world’s stock markets.
The continued downside in the oil price is just smashing the markets and smashing sentiment
Share prices have tumbled led by those of oil companies as crude oil in the United States slipped below $27 a barrel.
Oil prices lost yet more ground after the International Energy Agency, which advises industrialised countries on energy policy, warned that oil markets could “drown in oversupply” in 2016.
Two thirds of the way through January investors are braced for one of the worst monthly performances ever.
Nowhere was spared, among Europe’s biggest stock markets London’s benchmark FTSE 100 finished down 3.5 percent and Frankfurt’s Dax 2.8 percent.
The MSCI World equity index, which tracks the global shares, is already down 11 percent since the start of the year, heading for the biggest drop since 2008, the beginning of the last economic crisis.
The share sell-off meant money has piled into so-called safe haven investments with German government bonds particularly popular.
“I am quite pessimistic about the equity markets for the next two to three months. I do not see a 2008-style scenario, but I do see a bear market coming,” said Andreas Clenow, hedge fund trader and principal at ACIES Asset Management, suggesting a further 10 percent fall to come.
Hantec Markets’ analyst Richard Perry said it was too risky to buy into European stocks for now.
“The continued downside in the oil price is just smashing the markets and smashing sentiment,” said Perry.
Oil’s troubles sent the Russian rouble down to a new record low on Wednesday.