After three consecutive sessions of declines, stock markets worldwide are showing signs of recovery as U.S. shares climb while European and Asian shares are mostly down. The ongoing rout in oil prices continues as crude oil trade below $37 a barrel.
U.S. shares rose on Thursday, led by the beaten-down energy sector. The ongoing rout in energy prices has seen the sector suffer declines in recent days, causing investors to buy on the cheap. The Dow Jones Industrial Average rose 82.45 points, or 0.47%, to trade at 17574.75. Chevron (N:CVX) led the gainers with as it added $1.70, or around 1.9%, to trade at $89.30. The Standard & Poor’s 500 index gained 4.61 points, or 0.23%, to trade at 2052.23. The index’s energy sector rose 0.6% but is still down 8% on a monthly basis. On a yearly basis, the S&P 500 is down 0.3%. The Nasdaq Composite added 22.31 points, or 0.44%, to close Thursday’s trading session at 5,045.17. Crude oil prices tumbled on Thursday after the Organization of Petroleum Exporting Countries (OPEC) had announced that it produced more oil in the last month than any other month in the last three years. The announcement raised concerns over oversupply while demand outlook remains weak, mostly on China’s slowing growth, causing crude oil to drop 1.1% yesterday to trade at $35.76 a barrel, its lowest since 2009. Some expected that the apparent drop in U.S. stockpiles reported earlier this week would ease supply-glut concerns. However, the 3.6 million barrel drop was seen as refiner de-stocking prior to the U.S. tax year’s end.
European markets closed slightly lower on Thursday, however the declines were sufficient to cause some benchmarks to post the lowest close in nearly two months, led by the ongoing rout in energy and commodity prices. The pan-European Stoxx Europe 600 fell 0.27% to close at 363.21, its lowest level since mid-October. Including yesterday’s session, the index has finished in the red in seven out of the past eight sessions, initiated by sharp declines in metal and oil prices, which have driven investor confidence to new lows. Furthermore, the European Central Bank’s recent move away from the market’s easing expectations has reduced high-risk investment and bolstered the euro, thus reducing the attractiveness of exporting companies. The U.K.’s FTSE 100 index dropped 0.63% to trade at 6,088.05. The German DAX 30 rose just 0.06% at 10,598.93 and France’s CAC 40 shed just 0.05% to trade at 4,635.06.
This week’s major economic data releases conclude today with the release of German inflation and U.S. retail sales data. Next week holds the Federal Reserve’s upcoming Federal Open Market Committee (FOMC), where it is expected to update its interest rate policy.