Global stocks crash to record low on falling oil prices


All share index, capitalisation on Nigerian Stock Exchange defy trend
THE global financial market was in turmoil yesterday, with world stocks sinking to their lowest levels since 2013, hit by another tumble in oil prices to 13-year low. Anxieties actually ruled the waves as the equities were set for one of their worst monthly performances ever.

Indeed, the MSCI World equity index fell by 1.3 per cent to its lowest level since July 2013, and the index’s fall so far in January is already 9.9 per cent, the biggest drop since 2009.

There have been steeper monthly drops only six times in the index’s 28-year history, three of which occurred during the financial crisis of 2008/2009.

But the situation in Nigeria presented a different scenario, as market capitalization appreciated by 3.8 per cent to N301 billion yesterday.All share index also went up by 3.9 per cent to 878.69 points.

Analysts explained that with depreciating money market instruments, investors opted to invest in equities, to help the fundamentals on the Nigerian Stock Exchange, which had been sliding, to rebound. U.S. crude wallowed at its lowest since 2003 after the world’s energy watchdog warned the market could “drown in oversupply”.
U.S. futures shed 2.9 per cent to $27.63 while Brent crude lost 2.1 per cent, having slipped below $28 earlier in the session.

European shares touched their lowest level since October 2014, following losses in U.S and Asian stock markets, as the relentless slump in oil prices continued to drag on risk assets.

The FTSEurofirst 300 also fell by 2.8 per cent, set for its biggest single session loss of an already turbulent 2016.
Germany’s DAX, France’s CAC and Britain’s FTSE were all down by around three per cent and also set for their biggest fall of the year so far.

Oil shares in Europe are down 13 per cent already this year, also at their lowest levels since 2003. That has been a major weight on the FTSEurofirst 300, which is down around 10 per cent in 2016, which investors see as “correction” territory.U.S. stock futures were down 1.8 per cent yesterday, after Wall Street had seen its early gains on Tuesday erased by the tumble in U.S. crude.

The safe-haven yen however soared yesterday, as risk appetite soured, dragging the dollar to a one-year low, as investors trimmed the chances of more tightening by the Federal Reserve.Demand for German Bunds, another safe-haven asset, was also high, and the 10-year Bund yield fell to its lowest level since May ahead of a European Central Bank policy meeting tomorrow.

While the dollar fell against the yen, it was strong against emerging markets, compounding the misery for many countries already suffering from low oil prices.

Top emerging market shares fell 2.8 per cent to a six and a half year low, while EM currencies were crushed. Russia’s rouble hit a new record low of 80.295 to the dollar.In Asia, stocks surrendered all of Tuesday’s rare gains with MSCI’s broadest index of Asia-Pacific shares outside Japan falling 2.9 per cent on the day and hitting its lowest since October 2011.

The Hong Kong stock market’s benchmark index posted its single biggest daily fall since early August, while Japan’s Nikkei closed down 3.7 per cent.

Chinese markets fared only marginally better amid mounting talk that more stimulus may be on the way, possibly before the Lunar New Year holidays in early February.The CSI300 index fell 1.5 per cent, after rallying more than three per cent on Tuesday. The Shanghai Composite Index eased one per cent.