US Markets Fall
The US markets fell overnight, as investors continue to eye the uncertainty of China’s slowing economy, along with oil not being able to hold a 4% rise in overnight trading.
The Dow Jones Industrial Average lost 365 points, or around 2.2%, to 16,151 points. Alongside the losses on the Dow Jones, the S&P 500 fell 48 points, or approximately 2.5%, to 1,890 points. The NASDAQ was the biggest loser today, falling 160 points, or around 3.4%, to 4,526 points.
Oil Continues to Decline
Despite initially gaining 4% in overnight trading, Brent crude continued to fall. Tumbling around 2%, to approximately $US30.25, as data showed US Crude inventories rose by 234,000 last week. The data intensified investors’ worries that the supply side glut in oil will continue.
However, WTI Crude gained around 0.3%, to finish at $US30.5 a barrel.
Quiet in Europe
Europe was relatively quiet, despite the volatility in the US market. The German DAX fell a modest 24 points, or approximately 0.25%, to 9,961 points. However, the London FTSE 100 gained around 32 points, or about 0.5%, to 5,961 points, with the mining sector having some of the biggest gains, following positive Chinese export data.
China Continues to Slump
Despite the relatively positive trade balance data for last month, the Chinese markets continued to fall upon yesterday’s trading session. The Shanghai Composite slumped around 73 points, or around 2.4%, to 2,950 points. Likewise, the CSI 300 tumbled 60 points, or around 1.8%, to 3,156 points.
However in Japan, the Nikkei 225 gained almost 500 points, or approximately 2.9%, to 17,716 points, after falling for 6 consecutive sessions.
ASX Makes Gains
The ASX made some gains, following the end of yesterday’s trading, as mining and energy shares make a slight recovery. The S&P/ASX 200 added 62 points, or approximately 1.2%, to around 4,987 points.
Despite the overall gain on the market yesterday, BHP Billiton continued its decline, falling over 1.5%, to $14.77. This is a new 11 year low for BHP, which has slumped over 40% in the last year, amongst the slowdown in China, along with the fall in commodity prices. Fellow Iron ore giant Rio Tinto gained around 1%, to over $39.
Major oil miners Santos and Woodside Petroleum gained 5.4% and 1.3%, to over $3.10 and $27.40 respectively.
However, amongst the fall in the gold price, gold miners Newcrest and Northern Star Resources fell around 4.8% and 7%, to over $12.50 and $2.50 respectively.
Author: Simon Herrmann
Jan 14, 2016
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.