Markets

Oil at 11-year low but Wall St rebounds

Equity markets in Europe and Asia were largely higher but Spanish index down on election results

A trader works on the floor of the New York Stock Exchange. The Dow recovered some ground on last week.

Mon Dec 21 2015 - 17:48

A persisting world oil glut dragged Brent crude prices down on Monday to their weakest in more than 11 years and US crude to six-year lows, but Wall Street gained broadly after big declines a week earlier.

The dollar fell against the euro and yen as data from the Chicago Federal Reserve suggested the US economy grew at a below-average pace in November, before the Federal Reserve raised interest rates last week.

Wall Street started the abbreviated Christmas holiday week on a positive note, led by tech and financials, and even the S&P 500 energy sector rose despite oil’s tumble.

Equity markets in Europe and Asia were largely higher. The MSCI all-world stock index was up 0.3 percent, erasing some of its Friday losses.

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“There looks to be like a little relief bounce this morning as we move into the last two weeks of the year,” said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey. “It’s a fickle market.”

The Dow Jones industrial average was up 119.46 points, or 0.7 per cent, to 17,248.01, while the S&P 500 gained 15.29 points, or 0.76 per cent, to 2,020.84 and the Nasdaq Composite was 40.49 points, or 0.82 per cent higher at 4,963.57.

The Dow ended Friday down 2.1 per cent, while the S&P 500 lost 1.78 per cent and the Nasdaq 1.59 percent. All three fell on the week.

Brent futures recovered some ground and was down nearly 1.8 per cent at $36.22 after falling as much as 2.3 per cent to $36.04 a barrel earlier, the contract’s lowest level since July 2, 2004. US.crude fell to $33.98, its lowest level since February 13th, 2009.

While Europe’s index of major companies rose slightly, Spain’s Ibex share index fell 2.2 per cent and was on track for its worst day in almost three months after a fragmented national election.

In Spain, Prime Minister Mariano Rajoy’s conservative Popular Party won more seats than any other party but fell well short of a majority. Left-wing parties also failed to win a clear mandate to govern, and talks to form a coalition government could drag on for weeks.

Germany’s DAX rose 0.6 per cent, Britain’s FTSE 100 gained 0.9 per cent and France’s CAC40 index was up 0.5 per cent.

- Reuters

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