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Futures on the Dow gauge climbed 0.6 percent by 8:23 a.m. in London, while the Stoxx Europe 600 Index climbed 0.2 percent. The MSCI Emerging Markets Index retreated 0.6 percent to a 10-month low as Thai stocks plunged. Gold fell 0.6 percent. U.S. oil traded at $58.38 a barrel, having lost about 45 percent since a June 20 high. Indonesia’s rupiah headed toward its lowest level versus the dollar since the Asian financial crisis and Russia’s ruble slid 0.6 percent.
Benchmark oil prices have plunged as increasing U.S. production coincides with signs of slowing economic growth from Europe to China, and a
recession in Japan. The United Arab Emirates said OPEC will resist output cuts even if prices slump as low as $40. Australia’s treasurer said the government deficit will widen on lower commodity prices, while investors await a U.S. Federal Reserve meeting this week for signs as to the timing of potential interest-rate increases.
“The oil price collapse is symptomatic of a lack of global demand,” said Stewart Richardson, who helps oversee $180 million at RMG Wealth Management LLP in London. “Developed equity markets have become more jittery. We don’t see central banks as being in a position to appease markets at the moment.”
U.S. Futures
In the U.S. on Dec. 12, the Standard & Poor’s 500 Index lost 1.6 percent to 2,002.33, extending losses in the final hour to cap a weekly drop of 3.5 percent. The Dow sank 315.51 points, or 1.8 percent, to 17,280.83, sliding 3.8 percent for the week, its biggest decline since November 2011.S&P 500 futures traded at 2,003.1 today, while those on the Dow measure climbed to 17,289. Nasdaq 100 index contracts advanced 0.6 percent.
More than half of the 19 groups on the Stoxx 600 advanced today, led by a subindex of oil and gas firms as Technip SA, Europe’s largest oil-and-gas services company, walked away from a bid to buy French seismic surveyor CGG SA. Technip surged 6.4 percent while CGG plunged 30 percent.
Chocoladefabriken Lindt & Sprungli AG (LISP) slipped 0.4 percent amid a hostage crisis at one of the chocolate company’s cafes in Sydney, Australia.
All 10 industry groups on the emerging-markets stock gauge dropped today as the gauge heads for a seventh straight retreat. Thailand’s benchmark index plunged 6 percent, while Malaysia’s slid 2.1 percent and Indonesia’s declined 1.1 percent.
ETF Withdrawals
Investors withdrew more than $2.5 billion from U.S. exchange-traded funds that buy emerging-market stocks and bonds last week, the biggest outflow since January. All 24 of the emerging markets tracked by ETFs saw withdrawals, the data show.Hong Kong’s Hang Seng Index slid 1 percent and a gauge of Chinese companies listed in the city slumped 0.2 percent. The Shanghai Composite Index swung to a gain of 0.5 percent.
Tokyo’s Topix index was 1.5 percent lower and the Nikkei 225 Stock Average declined 1.6 percent, heading for its lowest finish since Nov. 17, as the yen fluctuated. Prime Minister Shinzo Abe’s ruling party won more than two-thirds of the seats in a lower house election amid the lowest turnout since World War II.
Market Role
The Organization of Petroleum Exporting Countries won’t immediately change its Nov. 27 decision to keep the group’s collective output target unchanged at 30 million barrels a day, UAE energy minister Suhail Al-Mazrouei said. The market will stabilize itself without OPEC targeting a price, he said.Brent crude, a pricing benchmark for more than half of the world’s oil, climbed 1 percent today. The contract slumped 2.9 percent to $61.85 a barrel in London on Dec. 12, for the lowest close since July 2009. Brent has tumbled 20 percent since Nov. 26, the day before OPEC decided to maintain production. WTI dropped 3.6 percent to $57.81 in New York Dec. 12, the least since May 2009.
The yield on Japanese 10-year bonds fell two basis points to 0.375 percent, the lowest level since April 2013. The rate on similar maturity U.S. government notes climbed two basis points after haven demand drove the yield on the November 2024 bond lower by eight basis points to 2.08 percent on Dec. 12.
Australia Deficit
Australia’s currency erased losses after touching 82.04 U.S. cents, the lowest level since June 2010. The government’s underlying cash deficit will deteriorate to A$40.4 billion ($33.2 billion) in the fiscal year ending June 30, 2015 from a May estimate of A$29.8 billion, Treasurer Joe Hockey said in the mid-year economic and fiscal outlook today. He said a slump in iron-ore prices and weaker-than-expected wage growth dragged tax receipts lower.Norway’s krone was 0.5 percent weaker. India’s rupee weakened 0.7 percent as wholsale prices stagnated. New Zealand’s currency retreated 0.3 percent to 77.57 U.S. cents and the Swiss franc was 0.2 percent weaker with the euro, which bought $1.2437. The Bloomberg Dollar Spot Index was little changed after dropping 0.2 percent Dec. 12.
Indonesia’s rupiah tumbled 1.8 percent to 12,686 per dollar, the biggest drop since Aug. 1 and the weakest level on a closing basis since August 1998. The currency is suffering amid speculation local companies are buying dollars before year-end and as foreign funds pull money from the country.
Gold for immediate delivery traded at $1,215.55 per ounce, while silver slid 1 percent to $16.8674.
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