Brent crude, the global benchmark was off almost 4% to trade as low as $32.90 a barrel. The markets returned to negative territory as crude oil took another leg down.
Advertisement
Wall Street has been taking hard hits this week, heavily influenced by worries over China and slides in commodity prices.
It was the worst one-day drop on Wall Street since late September, with the Dow Jones industrial average shedding almost 400 points. The Standard & Poor’s 500 index rose 5 points, or 0.3 percent, to 1,948. Importantly, wages went up 2.5% last month, matching the best gain in six years. It was the Dow’s worst five-day start to a year on record, according to Dow Jones.
“Our inaugural 2016 selloff may have climaxed yesterday”, Peter Kenny, independent market strategist and founder of Kenny’s Commentary, wrote in a note.
The market gains, which had roots in the solid Chinese trading session earlier, was aided by the U.S.jobs data.
US crude dipped 62 cents, or 1.8 percent, to $33.35 a barrel in NY.
China’s stock market is in complete disarray. Regulators backtracked on Thursday, abandoning the circuit breakers.
“Because of the circuit breaker, people felt they needed to sell now because they didn’t know what would happen”.
“The big influence continues to be concerns about what’s going on in China”, said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco.
Investors cheered as China stopped allowing its currency to lose value.
With Beijing accelerating the yuan’s depreciation to make its exports more competitive, investors fear the world’s second-largest economy is even weaker than had been imagined. The American currency has risen over the past year, leaving the yuan overvalued compared with other developing countries and hurting Chinese exporters. It still has $3.3 trillion in cash, but that’s the lowest level since late 2012. China on Thursday suspended new rules that triggered the market shutdowns, in a bid to calm investors.
Investors also braced for Friday’s US government jobs report, which could show how well-insulated the USA economy is from worldwide stresses. Not only are energy company profits crumbling, but some fear the oil plunge is a harbinger of a deeper slump in global growth. And oil prices are also firmer. Japan’s Nikkei, Australia’s S&P/ASX 200, Hong Kong’s Hang Seng Index and the Stoxx Europe 600 each fell over 2%. The Nasdaq briefly tumbled into a correction before bouncing back.
Apple briefly dipped below $100 for the first time in almost five months following reports of slowing shipments of the company’s iPhone 6S and 6S Plus models. It got as low as 16,518 on Thursday.
The price of gold and silver both rose more than 1 percent, with gold at $1,105.60 an ounce and silver at $14.20 an ounce.
Advertisement
One bright spot amid the worldwide rout was the precious metals sector, including gold, which is seen as a safe haven in times of economic uncertainty.
