Stock markets worldwide declined on Tuesday, while oil continued to struggle amid renewed concerns over a global supply glut, worsened by the recent Organization of the Petroleum Exporting Countries (OPEC), in which reduced production policies haven’t been adopted. Crude oil prices fell around 2% during the day, later paring some of it losses to settle 0.4% lower at $37.51 a barrel. Stock markets were also weighed down by rout in commodities, fueled by the significant drop on Chinese exports seen in November, marking the 13th consecutive month of declines in export activity.
U.S. stocks extended Monday’s declines to close lower in four out the five most recent sessions. The Dow Jones Industrial Average fell 162.51 points, or 0.92%, to trade at 17,568.00, about 20 points higher than its lowest session level. Exxon Mobil Corporation (N:XOM) led the decliners with a 2.83% loss. The Standard & Poor’s 500 index closed 13.48 points, or 0.65%, lower to trade at 2,063.59, led by a 1.9% decline in the materials sector and a 1.5% decline in the energy, sector. The health-care sector was the only sector to buck the downtrend, rising 0.2%. Despite briefly moving into positive territory, the Nasdaq Composite declined 3.57 points, or 0.07%, to trade at 5,098.24. Declines were limited by a boost in the iShares Nasdaq Biotechnology (O:IBB) ETF, which added 1.95%.
Asian markets also fell as falling commodity prices along with other economic data indicated that reduced demand from China may have curbed high-risk assets. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3%, moving near its November low. Recent data highlighted the woes China's economy is facing, as weak trade data on Tuesday reignited concerns over weakening demand in the country. Data relerased on Wednesday indicated that Chinese factories were facing a producer price deflation, offering another sign that easing measures put in place by the government have yet to restore momentum. The Japanese Nikkei dropped 1.1% to touch a three-week low, despite a surprising rise in the number of domestic machinery orders. Shanghai shares pared early losses to close 0.2% higher.
This week’s major economic data releases continue today with the release of Chinese inflation and German balance of trade data, followed by the Bank of England’s interest rate decision and U.S. jobless claims on Thursday. To end the week, German inflation and U.S. retails sales data will be released on Friday.