Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

GLOBAL MARKETS-Oil price fall hits energy shares, dollar rises

Published 26/05/2018, 06:45 am
Updated 26/05/2018, 06:50 am
© Reuters.  GLOBAL MARKETS-Oil price fall hits energy shares, dollar rises

© Reuters. GLOBAL MARKETS-Oil price fall hits energy shares, dollar rises

* OPEC and Russia consider oil output increase

* Wall St slips as oil fall drags down energy stocks

* Italy, Spain fears boost demand for U.S. bonds

* World shares steady but set for weekly loss (Updates with close of U.S. markets)

By Laila Kearney

NEW YORK, May 25 (Reuters) - Growing expectations of increased oil supply hit crude prices on Friday, lifting the U.S. dollar and weighing on energy shares, while political upheaval in Europe and uncertainty over a U.S.-North Korea summit restrained equity markets.

Brent crude futures LCOc1 fell $2.35, or 3 percent, to settle at $76.44 a barrel after Saudi Arabia and Russia said they were ready to ease supply curbs that have pushed prices to their highest since 2014. President Donald Trump on Friday signaled that a June 12 meeting with North Korean leader Kim Jong Un could still take place a day after he canceled the planned historic summit.

That led to a dip in gold prices, but it did little to increase demand for risk assets, investors said.

"At this point investors are shrugging off Washington headlines because in most cases they won't affect the markets and Washington has a hard time following through what they say," said Arian Vojdani, investment strategist at MV Financial in Bethesda, Maryland.

Gold prices dropped slightly after Trump's latest North Korea comments, but remained above $1,300 per ounce. Street ended mostly down as oil prices dragged down energy stocks ahead of a holiday weekend in the United States, which typically leads to low volume.

The Dow Jones Industrial Average .DJI fell 59.15 points, or 0.24 percent, to 24,752.61, the S&P 500 .SPX lost 6.46 points, or 0.24 percent, to 2,721.3 and the Nasdaq Composite .IXIC added 9.43 points, or 0.13 percent, to 7,433.85.

The S&P energy index .SPNY slid 2.9 percent, while Chevron (NYSE:CVX) CVX.N dropped 3.7 percent and Exxon Mobil (NYSE:XOM) XOM.N fell 2.1 percent and were the biggest drags on the Dow.

The tech-heavy Nasdaq .IXIC was aided by chipmakers, led by a 2.6 percent jump in Broadcom AVGO.O .

U.S. Treasury yields fell to their lowest level in three weeks as concerns about Italy's new government and a leadership change in Spain boosted appetite for low-risk investments. Prime Minister-designate Giuseppe Conte began assembling his cabinet on Thursday, with party leaders pushing for an 81-year eurosceptic economist to be given the pivotal post of economy minister. Italy's president is opposing the appointee. risk also reared its head in Spain, where a threat of no-confidence motions against Prime Minister Mariano Rajoy sent Spanish stocks and bond prices plunging. pan-European FTSEurofirst 300 index .FTEU3 rose 0.05 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.29 percent.

While yields on German and U.S. bonds fell amid the uncertainty, there have been few signs of a wide-ranging sell-off in higher-risk assets - Wall Street's volatility index .VIX stayed near four-month lows.

"Market reaction to heightened political risk remains reasonably muted," Indosuez Wealth Management global head of economic research Marie Owens Thomsen said.

She cited the example of Turkey and Italy, where a stock and bond sell-off has not spilled much into other emerging economies or euro zone states.

However, worry about Italy kept the euro under pressure against the dollar.

The dollar index .DXY rose 0.48 percent, with the euro EUR= down 0.53 percent to $1.1657.

The dollar has rebounded after touching two-week lows versus a basket of currencies .DXY on Thursday, helped by gains against commodity-linked currencies, as oil prices fell. worries that investors could shift assets from emerging markets to higher-yielding U.S. bonds have been a major headwind for emerging markets this year. Turkey has been the worst hit. GRAPHIC-Global assets in 2018

http://tmsnrt.rs/2jvdmXl GRAPHIC-Emerging markets in 2018

http://tmsnrt.rs/2ihRugV GRAPHIC-World FX rates in 2018

http://tmsnrt.rs/2egbfVh GRAPHIC-MSCI All Country World Index Market Cap

http://tmsnrt.rs/2EmTD6j

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.