Markets dragged down by oil prices

Global stock markets had a rocky time as oil prices bounced from multi-year lows as investors braced for an expected US interest rate hike, the first for almost a decade. Weakness in credit markets also weighed on international sentiment.

DUBLIN

The Irish market eased 0.58 per cent to leave the Iseq index at 6,589.96 points. The decline was less than in bigger European markets, although traders attributed that to a comparative lack of Irish stocks with with major exposure to oil and commodity risk.

But stocks with exposure to oil risk suffered. Tullow gave up 8.39 per cent to finish at €2.11. The shares were at €4.60 one year ago.

“It was weaker this morning but recovered a little this afternoon,” said one Dublin trader of conditions in the market generally. “It was red all across Europe this morning . . . Liquidity is drying up and that tends to exacerbate trends. Most stocks are down.”

Ryanair was down 0.19 per cent to €14.34½ after reports of tax inquiries into Brookfield Aviation International, a contract supplier of pilots it uses.

CRH lost 1.63 per cent to finish at €25.68½. Smurfit Kappa dropped 0.77 per cent to close at €23.07.

Dalata bucked the trend, closing 0.4 per cent higher at €5.02.

LONDON

Britain’s top stock index touched 10-week lows, pulled lower by a drop in oil and mining shares as commodity prices continued to fall. The prices of key metals, including copper and gold, fell as the dollar rose.

The FTSE 100 index was down 1.3 per cent at 5,874.06 points, its eight straight session of losses. The price of crude neared levels not seen since 2008 on growing expectations the global oil glut would worsen in the months to come.

Royal Dutch Shell fell 2.4 per cent and BP was down 2.6 per cent. The company faces a class action lawsuit in Mexico over its deadly 2010 Gulf of Mexico oil spill, which a civic group on Friday said it had filed against the company. Shares in mining companies Glencore, BHP Billiton, Antofagasta, Anglo American and Randgold Resources were down 2.1 to 6.3 per cent.

EUROPE

Declines in miners and energy producers dragged European stocks lower for a fifth session as investors took stock of the Fed’s rate decision.

Investors have turned averse to risky assets before the Fed’s meeting, and traders are pricing in a 74 per cent chance of the first rate increase since 2006. The Stoxx Europe 600 Index fell 1.8 per cent, wiping out early gains of as much as 1 per cent to cap its longest losing streak since July.

Italy’s FTSE MIB Index and Spain’s IBEX 35 Index were the worst performers in western-European markets, sliding 2.1 percent or more. Germany’s DAX Index lost 1.9 per cent.

A high-yield fund liquidating its portfolio also contributed to bearish sentiment across markets, said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland.

NEW YORK

US stocks fluctuated near a two-month low amid turbulence in credit markets, and as weakness in commodity shares reflected lingering global growth concerns before the Federal Reserve prepares to raise interest rates.

Bond market anxiety has caught the notice of equity investors after Third Avenue Management froze redemptions at a high-yield mutual fund last week, and Lucidus Capital Partners liquidated its entire high-yield portfolio.

The Standard and Poor’s 500 Index slipped 0.3 percent to 2,006.96 during lunch-hour in New York, after earlier falling as much as 1 per cent. Equities briefly erased declines as crude oil rose more than 2 per cent after swinging between gains and losses. The Dow Jones Industrial Average fell 25.79 points, or 0.2 per cent, to 17,239.42. The Nasdaq Composite Index declined 0.4 per cent.

– (Additional reporting: Reuters/Bloomberg)