Global Stocks Sink as Weak Oil, Wall Street Weigh

By Yuri kageyama, ap business writer

Global stock markets sank almost across the board Thursday as pessimism following a sustained weakness in oil prices and a dive on Wall Street prevailed over data showing economies on the mend.

KEEPING SCORE: France's CAC 40 dipped 1.3 percent to 4,336.69 in early trading, while Germany's DAX shed 1.3 percent to 9,831.58. Britain's FTSE 100 edged down 1.1 percent to 5,896.86. U.S. shares were set to recover. Dow futures were up 0.7 percent at 16,168 and S&P 500 futures were also 0.7 percent higher at 1,895.50.

ASIA'S DAY: Japan's benchmark Nikkei 225 dived 2.7 percent to close at 17,240.95. South Korea's Kospi was down 0.9 percent at 1,900.01. Hong Kong's Hang Seng lost 0.6 percent to 19,817.41, but the Shanghai Composite rebounded nearly 2.0 percent to 3,007.65. Other regional markets were also lower, falling in Taiwan, Singapore, Australia and Indonesia.

FRAYED NERVES: Oil prices at 12-year lows and a volatile start to 2016 in China's stock and currency markets have unleashed a torrent of negativity among investors. Some analysts say a correction in stock prices is inevitable after multi-year gains fostered by loose monetary policy but also point out the underlying economic picture is reassuring. China's trade improved in December, U.S. job creation has remained strong, and Australia, which is one of the countries highly vulnerable to China's slowdown, reported another month of strong job growth in December.

THE QUOTE: "When sentiment rules, data can only play a secondary role," said Michael McCarthy, chief strategist at CMC Markets in Sydney. "The lift in China exports in December not only smashed bearish expectations of a fall but spoke directly to the idea that the economy in China tanked" in the last quarter of 2015. "Yet these facts barely dented global investor psyches."

YEN CLIMB: The Wall Street jitters sent Japanese shares lower, including giant exporters such as automakers Toyota and Honda, as well as Bridgestone and trading companies. The yen has been sought as a safe haven in the absence of confidence in other currencies recently, and that's usually a negative for Japanese companies, which rely on exports to boost earnings. The dollar has dropped from about 121.50 yen in mid-December to about 118 yen lately.

ENERGY: Falling oil prices are adding to fears about a global slowdown. Investors worry that U.S. oil futures hovering at $30 a barrel could force some oil and gas companies to go bankrupt. Benchmark U.S. crude edged up 24 cents to $30.72 a barrel in electronic trading on the New York Mercantile Exchange. The contract made a slight gain in New York on Wednesday. Brent crude, a benchmark for international oils, fell 14 cents to $30.14 a barrel in London.

CURRENCIES: The dollar rose to 118.05 yen from 117.41 yen in the previous trading session. The euro fell to $1.0865 from $1.0883.



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