Stock markets turn lower as oil is back below US$32/barrel

By Elaine Kurtenbach ,AP

TOKYO — European shares mostly fell and Wall Street was expected to open lower on Monday as oil prices slipped back below US$32 a barrel. Earlier, Asian markets closed higher on hopes for more central bank stimulus. Keeping Score Germany’s DAX was flat at 9,764.99 and France’s CAC-40 lost 0.1 percent to 4,330.73. Britain’s FTSE 100 was flat at 5,900.98. Wall Street looked set for losses. Dow futures were down 0.2 percent and S&P 500 futures dropped 0.1 percent.

That represents a loss of momentum from last week, when stocks rallied on the European Central Bank’s indication it will consider more stimulus action at its next meeting in March. The signals also spurred expectations that the Bank of Japan would consider adding to its already lavish stimulus. Oil Prices A rally in battered crude oil prices that began Friday appears short-lived. After modest gains earlier in the day, U.S. crude was down 87 cents to US$31.32 per barrel in electronic trading on the New York Mercantile Exchange. On Friday, it shot up US$2.66. Brent crude, a benchmark for international oils, lost 74 cents to US$32.10 a barrel. It gained US$2.93, or 10 percent, on Friday.

Analyst Viewpoint “Markets have rallied on hints of further easing by the European Central Bank and speculation that the Bank of Japan will follow suit. But there has been no major change in fundamentals to support the rally, and the concern is if and when it fizzles out, markets could even drop below their recent lows,” Angus Nicholson of IG said in a commentary.

Japan Trade Investors shrugged off trade data for December released Monday that showed exports fell for three straight months, though imports fell at a faster pace thanks to the collapse in oil prices. The December trade surplus of 140.2 billion yen (US$1.2 billion) compared with a deficit of 379.7 billion yen in November and a deficit of 665.6 billion yen in December 2014. Share prices were supported by speculation the central bank may opt for further monetary easing at a 2-day policy meeting that starts Thursday.

Asia’s Day Japan’s Nikkei 225 rose 0.9 percent to 17,110.91 and Hong Kong’s Hang Seng jumped 1.4 percent to 19,340.14. The Shanghai Composite Index climbed 0.8 percent to 2,938.51 and Australia’s S&P/ASX 200 rose 1.8 percent to 5,006.60. South Korea’s Kospi was up 0.7 percent at 1,893.43, and shares in Taiwan, New Zealand and Southeast Asia also were higher.

Currencies The U.S. dollar edged down to 118.54 yen from 118.79 yen on Friday. The euro rose to US$1.0817 from US$1.0799.