World equities rocked by new oil slide

Wednesday, 6 April 2016 00:00 - - {{hitsCtrl.values.hits}}

AFP: Europe’s main stock markets dived Tuesday, after another sell-off across most of Asia that was sparked by a fresh drop in oil prices, dealers said.

Around 0900 GMT, Frankfurt’s benchmark DAX 30 index was down 2.5% compared with Monday’s finish, as dire German factory orders sparked fresh questions about the health of the eurozone’s biggest economy.

Elsewhere, France’s CAC 40 index shed 2.0% and Britain’s FTSE 100 dropped 1.4% in value.

World oil prices languished close to one-month lows on persistent worries over the global supply glut, weighing on energy shares.

Sentiment failed to win a boost from news that eurozone private sector business activity nudged higher in March after a sharp fall in February, according to a survey from data firm Markit.

“The FTSE 100 was down in early trading following downbeat overnight sessions on Wall Street and in Asia, with volatile crude oil prices and global economic concerns continuing to have an impact on investor sentiment,” said Russ Mould, investment director at stockbroker AJ Bell.

The mood darkened as gloomy data showed that German industrial orders – a key measure of demand for goods in Europe’s top economy – declined in February.

Provisional official data showed a decrease in orders of 1.2% month-on-month in February, weighed down by falling foreign demand. That followed an increase of 0.5% in January.

Analysts polled by financial services firm FactSet had pencilled in a modest increase of 0.3% for February.

“A poor February for German factory orders ... adds to eurozone woes,” said analyst Mike van Dulken at traders Accendo Markets.

In Asia and Europe, energy companies nursed heavy losses as oil prices fell further.

“WTI crude is eyeing a move back below $35 per barrel,” noted analyst Tony Cross at traders Trustnet Direct.

“As a result it’s the natural resources stocks that are scattered across the foot of the index, with Royal Dutch Shell and BP also being dragged very much into the fray.”

BP slid 1.94% to 338 pence and Shell’s ‘A’ shares shed 2.35% to 1,638 pence.

Investors were handed a negative lead from Wall Street, where the plunge in crude all but wiped out Friday’s jobs-fuelled gains.