European and US stocks fell yesterday as crude slid from a three-week high and a Chinese industrial profits fall pulled down emerging markets.
Wall Street dropped, hurt by a steep drop oil prices as well as a dip in Apple shares, pushing the S&P 500 back into negative territory for 2015. European stocks also declined, as low trading persisted in the holiday-shortened week.
EUROPE
The Stoxx Europe 600 Index slipped 0.5 per cent at the close of trading in London, with energy companies leading losses as oil resumed its retreat, while miners fell after data showed Chinese industrial company profits dropped.
With British and Irish markets closed, the volume of Stoxx 600 shares changing hands was more than two- thirds below the 30-day average. It has lost a big part of its annual advance as concerns over global growth took over just as the Fed increased its interest rates for the first time in almost a decade.
After surging as much as 21 per cent to a record in April, the Stoxx 600 has slid 12 per cent, trimming its annual advance to 6.4 per cent.
Germany’s Dax index fell 0.7 per cent yesterday, France’s Cac 40 index slid 1 per cent and Spain’s Ibex 35 index was down 1.4 per cent.
ArcelorMittal and Seadrill led declines among energy and commodity producers, falling more than 5 per cent. PostNL lost 3.2 per cent.
US
In New York, the S&P 500 energy sector lost 1.79 per cent, easily the poorest performer as a 3 per cent drop in oil prices led investors to unload shares of
Exxon Mobil
, down 0.73 per cent, and
Chevron
, which fell 1.84 per cent.
Following the Federal Reserve’s first rate hike in almost a decade this month, the S&P 500 is marginally lower for the year and the Dow Jones industrial average is almost 2 per cent weaker, disappointing investors hoping for a last-minute rally.
Apple lost 1.12 per cent and was the biggest drag on the S&P and Nasdaq. Its stock has lost 9 per cent in the past month with investors worried that annual iPhone sales could decline for the first time in 2016.
Valeant fell 10.48 per cent after the Canadian drugmaker said chief executive Michael Pearson was going on medical leave.
Fitbit rose 3.29 per cent after reports that the wearable gadget maker's iOS app was the most downloaded after Christmas, suggesting strong holiday demand.
Disney gained 1.31 per cent after the company's latest Star Wars film topped $1 billion in ticket sales.
ASIA
In China, the Shanghai Composite Index retreated 2.6 per cent, the biggest one-day drop since November 27th.
Investors are fretting that the end of a six-month ban on sales by shareholders with stakes of 5 per cent or more in Chinese companies will unleash another wave of selling just as reforms to the initial public offering system see a raft of new listings dilute demand for existing equities.
China Telecom declined in Hong Kong after its chairman became the latest high-ranking executive to be targeted by anti-graft investigators.
– (Additional reporting: Bloomberg, Reuters)
