Markets enter bear territory as oil collapse spooks investors

Turmoil returned to global financial markets yesterday as oil plunged past $27 a barrel, the Dow Jones Industrial Average sank as much as 565 points and global equities approached a bear market, fuelling a rush into haven assets.

DUBLIN

The Iseq in Dublin was battered just as hard as its European peers, slipping more than 3.2 per cent during the session.

There were no notable gainers yesterday, as gloom enveloped the Dublin exchange. The big blue-chip, globally focused Irish stocks all took beatings on the worldwide meltdown in equities and confidence.

CRH dropped 3.6 per cent, Glanbia was down 2.6 per cent and Kingspan fell 5.7 per cent, despite announcing a new partnership with KoolDuct.

Irish-headquartered energy stocks went south with the rest of the sector. Tullow Oil, which has a secondary listing in Dublin, was down more than 7 per cent, as was Providence Resources.

Even travel stocks, such as Ryanair, which traditionally benefit from falling oil prices, fell. The airline shed 2.3 per cent while ferries operator Irish Continental Group was down 3.8 per cent.

Other tourism-linked stocks were also down, due to worries over the health of the global economy. Hostelworld, was down 4 per cent, while airline tech supplier Datalex was down 2 per cent.

LONDON

Oil giant

Shell

fell almost 7 per cent after it said it expected full-year underlying earnings to tumble more than £7.3 billion, due to falling oil prices. The update comes ahead of a shareholder vote next week on its £38 billion deal to buy gas giant

BG Group

.

Pub group JD Wetherspoon fell 9 per cent after it warned on profits for the second time in two months. The group said it expected its operating margin for the half year to January 24th would be about 1.1 per cent lower due to higher staff costs.

Retailer WH Smith jumped almost 6 per cent after it said strong Christmas trading and the new craze for "colour therapy" helped it post its first main street sales rise in 14 years.

EUROPE

No sector in Europe made gains. Italian banks led European banking stocks lower after Italy’s Monte dei Paschi said some customers had been pulling savings out.

Monte Paschi

fell 22 per cent.

Germany's DAX Index slid 2.8 per cent to its lowest level in 13 months as export-oriented stocks dropped. Volkswagen fell 5 per cent and steel producer ThyssenKrupp retreated 3.5 per cent. Commerzbank and Deutsche Bank also contributed to declines, with losses of at least 5.5 per cent.

Zurich fell 10.8 per cent after the Swiss insurer launched a profit warning for its general insurance business, its second in four months.

Dutch electronics company ASML Holding was an outstanding gainer, up 4.6 per cent, after stronger-than-expected quarterly results.

NEW YORK

Heading into the afternoon, energy companies had dropped 4.4 per cent and raw materials tumbled 3.2 per cent to lead declines.

Devon Energy

and

Murphy Oil

were among the worst performers in energy, plunging more than 11 per cent.

Chevron

headed toward its biggest loss in four years.

The declining value in energy shares has fuelled speculation on whether Energy Transfer Equity agreement to buy Williams Companies for $38 billion would follow through. The doubts dragged Williams down 7.9 per cent while Energy Transfer fell 8.6 per cent.

Netflix lost 7 per cent, a reversal from the online video company's post-market climb yesterday after reporting fourth-quarter subscriber gains that topped estimates.

Tiffany and Amazon. com slumped more than 4.2 per cent as retailers in the benchmark were on pace to reach their worst level since April. Home Depot lost 4.8 per cent, falling for the fourth time in five days. – Additional reporting: Bloomberg/Reuters/PA