SEOUL, South Korea (AP) — Global stock markets were lower Friday as a persistent drop in the price of oil weighed on investor sentiment, eroding gains sparked the day before by the Fed’s first rate hike in nearly a decade.
KEEPING SCORE: Britain’s FTSE 100 fell 0.1 percent to 6,094.73 and France’s CAC 40 was down 0.5 percent to 4,652.61. Germany’s DAX slipped 0.6 percent to 10,677.26. Futures showed that Wall Street was likely to extend losses from the previous session. Dow futures fell 0.4 percent to 17,294.00. S&P 500 futures dropped 0.3 percent to 2,018.10.
ENERGY SLUMP: The price of oil hovered below $35 a barrel Friday following a big fall earlier this week after a surprise build in U.S. crude inventories. Energy and mining stocks have been pummeled this year as the sluggish global economy reduces demand even as supplies become more abundant.
ANALYST’S TAKE: “The Fed decision has clearly had no effect on the ongoing world of pain that oil prices find themselves in,” said Angus Nicholson, a market analyst at IG in Melbourne, Australia. “A wave of defaults and bankruptcies in the energy sector still looks likely to come, and these concerns are certainly weighing on markets.”
OIL PRICES: Benchmark U.S. crude was up 1 cent at $34.96 a barrel in electronic trading on the New York Mercantile Exchange. It closed 1.6 percent lower, or 57 cents, at $34.95 a barrel in New York on Thursday. It had not closed beneath $35 per barrel since Feb. 18, 2009 and traded above $60 a barrel as recently as June. Brent crude, a benchmark for international oils, was up 12 cents at $37.18 a barrel in London.
ASIA’S DAY: Japan’s Nikkei 225 sank 1.9 percent to 18,986.80 and South Korea’s Kospi slipped 0.1 percent to 1,975.32. Hong Kong’s Hang Seng finished 0.5 percent lower at 21,755.56 while Australia’s S&P/ASX 200 added 0.1 percent to 5,106.70. Stock markets in Southeast Asia were mixed.
JAPAN STIMULUS: The Nikkei index slumped even after the Bank of Japan said it will expand its asset purchase program to encourage more corporate investment. The central bank is pumping tens of trillions of dollar a year into the economy but has yet to make much progress.
CURRENCIES: The dollar fell to 121.27 yen from 122.58 yen on Thursday after the BOJ’s minimal addition to stimulus suggested Japan’s monetary policy won’t continue to diverge from the U.S. The euro gained to $1.0812 from $1.0835.
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