European equity-index futures signaled a return to the selloff that drove stocks to a two-year low this week. Hong Kong shares slumped with oil as investors shunned risk, while the yen and gold gained.
Futures on the Stoxx Euro Stoxx 50 Index slid 1.5 percent and Standard & Poor’s 500 Index contracts dropped. The Hang Seng Index headed for its worst start to a lunar new year since 1994 as trading resumed after a three-day break. The yen climbed for a fourth day as a Bloomberg gauge of dollar strength traded near its lowest level since November. Gold rose beyond $ 1,200 an ounce, while U.S. oil traded at $ 27 a barrel.
Signals by central banks from Europe to Japan that additional stimulus is at the ready is failing to ease investor concern over the creditworthiness of European banks and the continued selloff in crude oil. Societe Generale SA, France’s second-largest bank by market value, posted fourth-quarter profit that missed analysts estimates. Federal Reserve Chair Janet Yellen suggested that the central bank might delay, but not abandon, planned interest-rate increases in response to recent turmoil in financial markets.
U.S. stocks halted a two-day rally as renewed declines in the price of crude set the tone on global financial markets, dragging down currencies of resource exporters and stoking demand for havens from gold to Treasuries.
The Standard & Poor’s 500 Index followed European shares lower after American crude’s slide approached 5 percent, undoing part of a 21 percent surge in oil to end last week. Emerging-market shares headed for the biggest two-day gain since August on bets that central banks will step up stimulus. Yields on 10-year Treasury notes fell three basis points 2.02 percent. The Russian ruble slid against all of its 31 major counterparts, while gold futures jumped 1 percent.
The S&P 500 fell 0.6 percent at 12:30 p.m. in New York, after a 2 percent rally on Friday. Equities are on track for their worst January since 2009 amid worries that China’s slowdown will weigh on global growth, with plunging oil prices exacerbating those concerns. The S&P 500 sank to a 21-month low last week before rallying.
Halliburton Co. declined Monday after posting a quarterly loss, and Exxon Mobil Corp. slide following crude’s biggest two-day rally in more than seven years. McDonald’s Corp. gained after the fast-food giant’s earnings beat analysts’ forecasts. Tyco International Plc surged 8.6 percent after Johnson Controls Inc. agreed to merge with the company.
Source : Bloomberg