Global stocks down after oil slide, weak China trade
BEIJING - Global stocks fell Tuesday after Chinese trade contracted and oil traded at its lowest in six years.
In early European trading, Germany's DAX lost 0.7 percent to 10,814.51 and France's CAC-40 shed 0.6 percent to 4,728.91. Britain's FTSE 100 fell 0.4 percent to 6,202.01.
Wall Street looked set for a second day of declines: Dow futures were down 0.8 percent and S&P 500 futures dropped 0.9 percent.
Oil was at its lowest since mid-2009 after OPEC's decision last week to maintain production levels. That stance combined with slower global growth has left the world awash in oil. Brent crude added 21 cents to $40.94 per barrel in London after plunging $2.27 on Monday to close at $40.73. Benchmark U.S. crude gained 9 cents to $37.74 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.32 on Monday to close at $37.65.
"Market focus at the moment is the potential deflationary effects of lower oil prices, and the signaling that aggregate demand is weak," said Michael McCarthy, chief strategist at CMC Markets in Sydney. "At some stage however, there may be a collective awakening to the immediate impact lower input prices have on profits," he said in a commentary. "The slide in oil prices is a 'good' fall in that it reflects increasing supply rather than falling demand, and this is not yet reflected in share prices."
Customs data showed imports and exports shrank again in November, though there were signs weak domestic demand might be improving. Exports contracted by 6.8 percent, accelerating from October's 3.6 percent fall. Imports fell 8.7 percent, an improvement over the previous month's 16 percent decline. Import volumes of some goods such as crude oil, fresh fruit and cooking oil rose. "It may suggest a stabilization of domestic demand momentum," said Louis Kuijs of Oxford Economics in a report.
China's Shanghai Composite Index fell 1.9 percent to 3,470.07 and Japan's Nikkei 225 lost 1 percent to 19,492.60. Australia's S&P/ASX 200 retreated 0.9 percent to 5,108.60 and Seoul's Kospi declined 0.7 percent to 1,949.04. India's Sensex was off 0.5 percent at 25,401. Taiwan, Singapore, Jakarta and New Zealand also declined.
The dollar declined to 123.06 yen from 123.30 yen on Monday. The euro edged up to $1.0867 from $1.0835.