The roller-coaster week in India’s benchmark Sensex appears to follow suit with much of the major global stock exchanges [Xinhua]
Asian stocks were reeling in early trading Thursday a day after the Dow Jones Industrial average fell by nearly 10 per cent year on year in the US.
On Wednesday, despite what appeared to be a promising start as oil futures rose more than two per cent, jittery investors were left wondering what impact external markets could have on the US economy.
The Dow Jones fell 2.21 per cent, the S&P 500 fell 2.5 per cent while the Nasdaq took a beating and fell 3.6 per cent by the end of trading.
Asian stocks followed suit on Thursday. South Korea’s Kospi fell 0.99 per cent at press time; just a day earlier it posted its strongest gains since the beginning of the year.
India’s benchmark Sensex, which had been on a roller-coaster all week, was down 0.41 per cent at press time.
Japan’s Nikkei reversed all the gains of a day earlier and fell 3.04 per cent.
Australia’s ASX was pulled down by energy futures and fell by 1.5 per cent.
The only market that was doing better on Thursday was China’s benchmark Shanghai Composite, gaining 0.70 per cent at 2pm local time.
One could be forgiven for thinking markets were on the verge of panicking due to energy price volatility.
On Wednesday, it appeared as if oil markets were rebounding for the first time in nearly 10 days after better than expected data from China.
The international benchmark Brent Crude was trading at $31.50, up 2.07 per cent from Tuesday’s close of $30.86.
US benchmark West Texas Intermediate was trading at $31.10, up 2.17 per cent from Tuesday’s close of $30.40.
On Tuesday, oil prices had previously and briefly dipped below $30, making a prediction of $20 a barrel in 2016 by global investment firm Goldman Sachs all the more real.
But then it all went to hell. At the end of trade on Wednesday, Brent was back down at $30.05 a barrel.
West Texas Crude was back down at $30.53.
The downward spiral of oil prices prompted another investment firm – Morgan Stanley – to reforecast its outlook on oil prices saying a strengthening greenback could push a barrel down to $20.
But analysts from the Royal Bank of Scotland went one further saying that oil prices could drop to $16 a barrel in 2016, which they described as a cataclysmic year.
In November 2014, when the first signs of an oil glut began to emerge and OPEC appeared unwilling to take action to curb output, we at The Brics Post joked about the days oil prices were $11 a barrel in recent memory (December 2000).
Not a laughing matter anymore.
The BRICS Post with inputs from Agencies
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