European stocks slide on oil price slump

Crude prices stabilised after diving more than two percent on Tuesday on increasing fears of a global supply glut, as continued production in the US and elsewhere offsets an OPEC output cut deal.

European stocks slide on oil price slump

World Bulletin / News Desk

European stocks sank on Wednesday, after losses in Asia and on Wall Street, as the energy sector took a beating from an oil price slump.

"Cheap oil is taking its toll on the global equity markets," noted analyst Ipek Ozkardeskaya at trading firm London Capital Group.

Crude prices are considered crucial to the smooth running of world financial markets because the commodity oils the wheels of the global economy.

In afternoon trading, the London stock market had shed 0.4 percent, while Frankfurt fell 0.3 percent and Paris wiped out 0.5 percent in value compared with the close on Tuesday.

"European equities are in the red... as the slump in the price of oil continues to weigh on market sentiment," said analyst David Madden at CMC Markets.

"The other fear about falling oil prices is declining inflation, as it can hamper growth prospects."

New York oil on Tuesday hit a seven-month low at $42.75 per barrel, and London Brent crude struck a similar nadir at $45.42.

Prices later recovered somewhat but remained on a downward trend on Wednesday.

The oil slump saw energy firms dragged down Tuesday on Wall Street.

The sell-off continued in Asia, with Tokyo down 0.5 percent, Hong Kong losing 0.6 percent and Sydney sinking 1.6 percent.

Shanghai bucked the trend to end up 0.5 percent after the US-based MSCI finally approved Chinese mainland-listed stocks, or A-shares, for inclusion in its emerging markets index.

Wall Street stocks rebounded at the opening bell on Wednesday, with the Dow edging up 0.06 percent.

Elsewhere Wednesday, investors digested the British government's legislation plans, laid out in Queen Elizabeth II's speech to parliament, focused heavily on Brexit plans.

British Prime Minister Theresa May presented eight draft laws to take Britain out of the European Union in a programme read out by the queen.

The laws include the "Great Repeal Bill" to overhaul existing EU legislation and separate bills on customs, trade, immigration, fisheries and agriculture.

But it was comments by Andy Haldane, the Bank of England's chief economist and a member of its monetary policy committee, that he would be ready relatively soon to vote for an interest rate hike that sent the pound shooting higher.

Güncelleme Tarihi: 21 Haziran 2017, 17:09