Stock markets sink as oil keeps sliding
12 December 2015, Nirapad News: Stock markets on both sides of the Atlantic fell on Friday and oil sank further as fears about global oversupply mounted.
In London, the FTSE 100 closed under 6,000 points as investors dumped commodities shares, reports the BBC.
The blue-chip index ended the day 2.2% lower, down 135 points at 5,952.7.
On Wall Street, the S&P 500 fell almost 2%, with the Dow Jones down 1.8% and the Nasdaq 2.2% lower.
Tim Courtney, chief investment officer of Exencial Wealth Advisors, said: “We’re stockpiling commodities and demand is not picking up. It’s kind of a depressing market.”
The International Energy Agency said the oil glut would worsen in 2016 as demand slowed and the Opec cartel showed no signs of cutting production.
Oil prices fell further, with Brent slipping below $38 a barrel for the first time in seven years to close 4.5% lower at $37.93.
US crude ended 3.1% lower at $35.62.
Analysts said the forecast for warm weather in the US was also dampening demand.
Art Hogan, chief market strategist at Wunderlich Securities in New York, said: “About 10% of the S&P 500 is energy and commodity related, and it is a barometer for global economy. When you see such a plunge, it worries investors.”
He added: “Until the oil market finds a support level, the market will remain unsettled.”
The CBOE volatility index, known as Wall Street’s “fear gauge”, was up 19.5% at 23.1 – its highest level since early October.
Anglo-African financial services company Old Mutual slumped another 10.6% after dropping sharply on Thursday.