Global Stock Rally Loses Steam As Sliding Oil Prices Weigh On Investor Sentiment

Asian stock markets were mixed while European equities opened broadly lower Wednesday after crude oil prices retreated over 2 percent in Asia trading hours. Oil prices, which had recovered over the past two days, were weighed down by news that oil workers in Kuwait had called off their three-day strike and pledged “to make every effort to immediately return production to its previous level.”

Brent crude futures, the global benchmark for oil prices, were trading down 1.43 percent at $43.34 a barrel at 6:53 a.m. EDT, while the U.S. benchmark, West Texas Intermediate, dropped 2.02 percent to trade at $40.25 a barrel.

“We were bearish before Doha. Prices had risen too far on false hopes of a deal. Now that this has been corrected, we're more neutral in our price outlook,” Georgi Slavov, head of research at commodities brokerage Marex Spectron, told Reuters. “Generally, we think that oil prices have passed their bottom this year, and we expect a Brent price range of $45-$55 per barrel for the mid-term.”

Overnight in Asia, the Shanghai Composite Index closed down 2.3 percent, while the smaller Shenzhen Composite Index ended the day down 4.4 percent. India’s S&P BSE Sensex and Japan’s Nikkei 225 Index, however, were relatively flat, losing 0.11 and 0.19 percent respectively, while South Korea’s Kospi Index was down nearly 0.3 percent.

In Europe, meanwhile, stocks fell from a three-month high Wednesday, with the pan-European Stoxx 600 trading down 0.07 percent in early afternoon trade. In the U.K., where investor sentiment was likely hurt by jobs data that showed unemployment in the country had risen by 21,000 to 1.7 million between December and February — the first increase since the May-July 2015 period — the benchmark FTSE 100 Index dropped 0.27 percent just past noon.

U.S. index futures were all down less than 0.1 percent at 6:57 a.m. EDT Wednesday.