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Stock markets, oil prices rebound after rout

twitter-logo PTI        Last Updated: November 21, 2018  | 19:25 IST

London, Nov 21 (AFP) Stock markets and oil prices recovered slightly Wednesday after a rout, alongside warnings of renewed volatility and slower global economic growth. The world economy has peaked and faces a slowdown driven by international trade tensions and tighter monetary conditions, the Organisation for Economic Cooperation and Development warned. It comes a day after stock markets plunged as a beating for the technology sector helped wipe out all of Wall Street's Dow index 2018 gains. "Global stock market jitters have returned this week with investors growing increasingly skittish as the rout in US tech stocks, which began last month, deepens," said David Cheetham, chief market analyst at XTB trading group. "A broad basket of European shares fell to their lowest level since early 2017 yesterday and while we have seen a bounce ... the markets remain susceptible to further declines going forward." Milan's stock market meanwhile held onto gains and the euro climbed versus the dollar when Brussels, as expected, officially rejected Italy's big-spending budget, clearing the path for unprecedented sanctions and deepening a bitter row with Rome's populist government. The pound rose against the dollar as British Prime Minister Theresa May heads to Brussels to hammer out the final details of her Brexit plan, buoyed by the fact hardliners in her Conservative party are struggling to muster support for a leadership challenge. Bitcoin continued under pressure, hitting USD 4,529.36. In commodities trading, oil recovered slightly after slumping more than six per cent, with traders fretting that Saudi Arabia may not deliver on planned production cuts. US President Donald Trump's support for Riyadh in the case of murdered journalist Jamal Khashoggi has been taken by some observers as a move to prevent them from lowering output at the December meeting of OPEC and non-OPEC members. "At the heart of the matter is the lack of market respect for OPEC rhetoric regarding deep production cuts, (which) have been ignored as the market now questions if the projected reduction would be entirely sufficient to rebalance markets given the expected glut in the first quarter," said Stephen Innes, head of Asia-Pacific trade at OANDA. Adding to the dour mood is the China-US trade war -- which shows no signs of easing just a week before Trump and China's Xi Jinping are due to meet -- as well as US waivers on buying Iranian oil and a slowing global economy. Crude prices have plunged almost 30 percent from four-year highs touched at the start of October. In company news meanwhile, shares in French car giant Renault gained 1.1 per cent to 58.97 euros after plunging more than nine per cent over two days, triggered by the arrest of its chief executive Carlos Ghosn. Japanese authorities Wednesday extended by ten days the detention of Ghosn, who is also chairman of Nissan, over allegations of financial misconduct. (AFP) ZH ZH

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