Global Stocks Mostly Lower Monday 09/16 05:53
Global stock markets sank Monday after crude prices surged following an
attack on Saudi Arabia's biggest oil processing facility.
BEIJING (AP) -- Global stock markets sank Monday after crude prices surged
following an attack on Saudi Arabia's biggest oil processing facility.
Market benchmarks in London and Frankfurt opened lower while Jakarta's
benchmark lost 1.8%. Shanghai was unchanged, and Japanese markets were closed
for a holiday.
Benchmark U.S. crude jumped $4.75 per barrel following the attack on oil
producer Saudi Aramco's Abqaiq facility for which Yemeni rebels claimed
responsibility. Brent crude, the international standard, was up $5.54 after
spiking nearly $8 at one point.
That hurt airline stocks and other businesses with big fuel bills and put
upward pressure on inflation expectations. At the same time, higher prices are
a boost to oil exporters such as Malaysia and temporarily pushed up share
prices for crude producers.
"This is obviously not a good day if you are an oil importer," said Chris
Weston of Pepperstone Group in a report.
"This isn't just a question of who or even what actually caused the attacks,
but some have questioned whether we will we see further attacks and Saudi
infrastructure is vulnerable," said Weston.
In early trading, London's FTSE 100 lost 0.1% to 7,359.01 and Frankfurt's
DAX retreated 0.8% to 12,369.23. France's CAC 40 lost 0.7% to 5,616.75.
On Wall Street, the future for the benchmark Standard & Poor's 500 index was
off 0.4% and that for the Dow Jones Industrial Average also was down 0.4%.
In Asia, the Hang Seng index was off 0.8% at 27,124.55 after dropping 1.1%
at one point following more anti-government protests.
The Hong Kong airport reported passenger traffic fell 12% in August from a
year ago, a sign of the economic impact of demonstrations that began three
"Oil ructions aside, investors would have already been nervous today in Asia
as a belligerent China returns from holiday," Jeffrey Halley of Oanda said in a
The Shanghai Composite Index was off 0.5 points at 3,030.75 as trading
resumed following a three-day holiday weekend. Sydney's S&P-ASX 200 was up 4
point at 6,673.50.
Seoul's Kospi gained 0.6% to 2,062.22 while India's Sensex lost 0.7% to
37,111.12. Taiwan advanced and Southeast Asian markets retreated.
Investor anxiety about the U.S.-Chinese tariff war eased following
conciliatory gestures last week by both sides ahead of negotiations next month
on their conflict over trade and technology.
President Donald Trump postponed planned Oct. 1 tariff hikes to Oct. 15,
opening up the possibility they might be put off indefinitely if the talks make
progress. Beijing announced Friday it would lift punitive duties on soybeans,
China's biggest import from the United States, and some other farm goods.
Despite that, the two sides have given no indication of progress toward
resolving the core issues in the sprawling dispute that threatens global
On Wall Street, the Standard & Poor's 500 index turned in its third straight
weekly gain Friday, even as major U.S. indexes ended the day mostly lower.
A slide in technology stocks, along with losses in consumer-focused and real
estate companies, offset solid gains elsewhere in the market, including big
Wall Street banks and industrial stocks.
This week, investors are looking for a possible U.S. interest rate cut by
the Federal Reserve. The central bank lowered its benchmark rate in July by a
quarter point, its first cut in a decade, to prop up U.S. economic growth.
The S&P 500 index and the Dow both slipped 0.1%. The technology-heavy Nasdaq
CHINA-AUSTRALIA DAIRY PURCHASE: Bellamy's Australia Ltd., a dairy and
producer of infant formula, said it agreed to be acquired by China's Mengniu
Dairy Co. for 1.5 billion Australian dollars ($1 billion). The deal adds to
Chinese global acquisitions aimed at profiting from China's growing market for
imported food. Mengniu is one of China's most prominent milk brands and also
sells in Singapore, Myanmar and Indonesia.
ENERGY: Benchmark U.S. crude rose $4.40 to $59.25 per barrel in electronic
trading on the New York Mercantile Exchange. The contract lost 24 cents on
Friday to close at $54.85. Brent crude jumped $5.30 or 8.9%, to $66.52 per
CURRENCY: The dollar declined to 107.75 yen from Friday's 108.09 yen. The
euro sank to $1.1052 from $1.1078.