USA and European Union sanctions against Iran were lifted on Saturday, paving the way for Iran to put its copious oil supplies back on the global market for the first time in years. Australia’s S&P/ASX 200 fell 1 per cent to 4,846.00.
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Other Asian markets also rose after China’s GDP data bolstered stimulus hopes.
Brent oil nosedived as low as $27.67 in earlier Asian trading hours, touching a new 12-year low before rebounding back above $29, but then slipped back again to $28.78 in late European deals.
Japan’s Nikkei tumbled as much as 2.8 percent to a one-year low before closing 1.1 percent lower. It has lost 20 percent from its peak hit in June, meeting a common definition of a bear market.
The pan-European FTSEurofirst 300 index was up 1.4 percent by 0820 GMT after slipping to a 13-month low in the previous session.
The volatile Shanghai Composite index .SSEC initially pierced through intraday lows last seen in August before paring the losses and closed up 0.4 percent. The benchmark index has shed almost 18% so far this year.
European markets will have to do without any United States trading or news this afternoon, thanks to Martin Luther King Day.
In oil markets, the bounce in crude futures from their new lows was similarly short-lived.
The Conference Board’s USA economic indicators index for December, the Chicago Federal Reserve’s national activity index for December and announcements concerning the treasury auctions of 2-year, 5-year and 7-year notes round up the economic events of the week.
Alstom fell 8.9 percent, its worst day in two years, with traders attributing the move to technical selling triggered by the company’s 3.2 billion euro share buyback programme.
“The mining rally is a relief rally with the stocks putting on gains after such heavy falls recently”, GKFX analyst James Hughes told AFP.
Analysts at JP Morgan said that oil-producing countries will need to sell large quantities of stocks and bonds this year to cover the shortfall in their budgets resulting from the slump in oil prices.
CURRENCIES: The U.S. dollar edged up to 117.84 yen from 117.50 yen on Monday.
The People’s Bank of China (PBOC) did its bit to calm nerves by keeping the yuan largely steady, setting the currency’s midpoint fix at 6.5596 per dollar.
The yen held firm after having risen to five-month high of 116.51 to the dollar JPY= on Friday. It last stood at 117.31.
Yet growth of 6.9 per cent for 2015 as a whole was still the slowest in a quarter of a century, while monthly readings on industrial output and retail sales were weaker than expectations.
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THE QUOTE: China’s “official data do not point to a hard landing in the fourth quarter of 2015, but they provide little reason to stop worrying about China’s drag on the global economy, either”, said Bill Adams, senior worldwide economist at PNC Financial Services Group. The government may further ease monetary policy such as cutting interest rates or lenders’ reserve- requirement ratios, according to Northeast Securities Co and Central China Securities Co.
