Europe stocks slump on Fed worries, oil forecast
September 11 2015 09:20 PM
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Traders work in front of the DAX board at the Frankfurt Stock Exchange. The DAX 30 lost 0.85% to 10,123.56 points yesterday.

AFP/London

European stock markets fell yesterday, with investors mostly wary ahead of next week’s US interest rate decision and oil company shares sliding on a forecast for crude prices to halve yet again.
London’s FTSE 100 index of leading shares slipped 0.62% to close at 6,117.76 points.
In the eurozone, the CAC 40 in Paris dropped 1.04% to finish at 4,548.72 points and in Frankfurt the DAX 30 lost 0.85% to 10,123.56.
The euro, meanwhile, rose to $1.1331 from $1.1275 late on Thursday in New York.
Global investors are nervously awaiting the US Federal Reserve policy meeting on September 16-17, with uncertainty over whether it will lift interest rates for the first time in nine years or hold fire owing to the recent market turmoil.
A hike in borrowing costs would likely hinder investment possibilities and also fan a flight of capital back to the US in search of better returns, to the detriment of emerging markets.
Investors were also digesting the impact of US producer price data released yesterday on the Fed’s decision.
Nevertheless analysts said the data showed there is little pressure for a quick return to the Fed’s target level of inflation.
In Europe, official data published yesterday showed Germany’s inflation rate at just 0.2% in August, still way below the level of just under 2.0% that the European Central Bank targets.
US stocks were mostly lower yesterday with petroleum-linked equities especially weak due to a sharp drop in oil prices.
Near mid-day in New York, the Dow Jones Industrial Average was up a slight 0.10%, while the broad-based S&P 500 slipped 0.30% and the tech-rich Nasdaq Composite Index was down 0.40% to 4,771.25.
US oil prices dropped almost 3% after Goldman Sachs slashed its price forecast for the commodity amid a global oversupply, saying it could drop to $20 per barrel, less than half of its current level.
Dow member ExxonMobil fell 0.7% in early trade, while EOG Resources lost 2.0% and Apache tumbled 2.8%.
In London, shares in BP dipped 0.54% to close at 333.50 pence and Shell’s A share gave up 0.12% to 1,612 pence.
In Paris, shares in Total dropped 0.64% to finish at €39.69.
The International Energy Agency also said Saudi Arabia’s policy of protecting its market share will end up squeezing high-cost producers like US shale drillers who next year may face the biggest drop in output in nearly a quarter century.
However cheap fuel is also hooking consumers, with oil demand growth set to hit a five-year high this year, the IEA added.


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