Global Markets and Oil Drift Lower

Nichole Harper
07 Sep, 2015
New York City

Global markets lacked direction and trended lower as crude oil price declined on the rising production from Nigeria and North Sea. Stocks in China resumed the decline after a long weekend and U.S. markets were closed for Labor Day.

[R]1:35 PM New York City, New York – Global markets lacked direction and trended lower as crude oil price declined on the rising production from Nigeria and North Sea. Stocks in China resumed the decline after a long weekend and U.S. markets were closed for Labor Day.[/R]

Global markets traded lower and the U.S. markets were closed for Labor Day and crude oil and commodities traded volatile.

Brent crude oil prices in London traded lower after shipments from Nigeria and the North Sea. Oil production in Nigeria is reaching a high not seen since August and North Sea output is set to reach a high not reached since May 2012.

Immediate futures of Brent crude declined $1.45 to close at $48.17 a barrel in London, U.K.

European Markets

In London trading, FTSE 100 index gained 33 or 0.6% to 6,076 and in Frankfurt the DAX index rose 53.91 or 0.5% to 10,091.84.

In Paris, CAC 40 index increased 16.83 or 0.4% to 4,540.38.

Glencore Plc soared 6.6% to 131.20 pence after the Switzerland-based natural resource producer and trader said it will suspend its dividends till 2016, sell assets to raise $2 billion and will raise $2.5 billion from a stock issue

The restructuring will reduce the net debt to $20 billion from $30 billion by the end of next year.

The miner had suspended copper production for 18-months from Katanga operation in the Democratic Republic of Congo and Mopani project in Zambia.

Tesco Plc fell 0.1% to 185.70 pence after the U.K.-based grocery retailer agreed to sell its South Korean retail business to a group led by private-equity firm MBK Partners Ltd. for £4 billion or $6.1 billion.

Tesco will utilize net proceeds to reduce its debt of £4.23 billion.

Tesco is in businesses restructuring and reported full-year net loss of $8.5 billion through February and has already closed 43 unprofitable stores in April.

The transaction is expected to close fourth-quarter of this year.

Asian Markets

Stocks in Tokyo managed to close higher in volatile trading and investors awaited reopening of the U.S. market after a 3-day weekend tomorrow.

Market indexes and currencies across Asia declined and stocks in Shanghai opened higher after a four-day long weekend but fell nearly 4% at close.

The Nikkei 225 Stock Average gained 68.31 or 0.4% to 17,860.47 and the broader Topix index added 1.12 to 1,445.65.

The yen strengthened to 119.33 against a dollar.

Toshiba Corporation increased 1.8% to 352.70 yen after the diversified company reported net sales in the year ending in March 2015 jumped 3.3% from a year ago to 6.65 trillion yen.

Net in the year swung to a loss of 37.8 billion yen compared to profit of 60.2 billion yen and diluted loss per share swung to 8.93 yen from diluted earnings per share of 14.23 yen in the same period a year ago.

Toshiba said the company had overstated its profit by 224.8 billion yen over a seven-year period, four times larger from the initial estimate.

Market indexes and stocks continued to slide in Mumbai trading for the fourth day in a row.

Foreign investors have been net sellers of stocks in India and emerging markets as U.S. investors’ trimmed exposure to international stocks and prepare for the long awaited rate increase.

Foreign investors have sold nearly 4,000 crore in last four trading days, according to the data available from two domestic exchanges. Foreign investors in all have lowered exposure to Indian stocks by nearly 30,000 crore between May and August.

The ongoing selling has put rupee under pressure and the currency is now nearing a record low.

In addition, market sentiment was on the defensive after Chinese stocks opened sharply lower after a 4-day long weekend and the benchmark index in Shanghai fell 3.4% in Monday’s trading.

Rupee weakened 36 paisa to 66.82 against one U.S. dollar.

The Sensex Index slipped 308.09 or 1.2% to close at 24,893.81. The CNX Nifty decreased 96.25 or 1.3% to 7,558.80.

Sensex declined for the fourth day in a row and dipped to a 15-month low after losing 16% from its March peak.

Reliance Infrastructure signed a naval and commercial services agreement with the U.A.E. based Abu Dhabi Ship Building.

SREI Infra plans to sell its stake in Viom Networks.