Global stocks take a rollercoaster ride as investors chase ‘oil-usive’ recovery

Global stocks experienced a mixed performance yesterday, as investors sought recovery from the significant drop in the previous session, induced by a sharp dip in oil prices. The 10-year US Treasury note, which reached a 16-year high on Tuesday, experienced a retreat after a disappointing US recruitment report surfaced.

Adam Sarhan of 50 Park Investments stated that investors are entering a situation now where any negative economic data or soft economic data will likely be viewed as bullish for stocks.

US stocks managed to reverse a three-day downward trend, with the tech-heavy Nasdaq advancing by 1.4%. Both the Dow Jones Industrial Average and the S&P 500 reported gains, while European indices remained largely unchanged. Japan’s Nikkei, however, suffered a slump.

The 10-year Treasury note, a key indicator of interest rates, has recently been the subject of heightened attention due to fears that the Federal Reserve may maintain elevated interest rates for an extended period.

Susannah Streeter, head of money and markets at stockbroker Hargreaves Lansdown, expressed concerns about the ‘chill winds of worry’ regarding the persistence of high interest rates, and the lack of relief from the sell-off.

The latest US jobs data, showing an unexpected increase in vacancies in August, has sparked a fresh wave of anxiety. Additionally, oil prices took a hit following a surprising rise in US gasoline supplies recorded in weekly petroleum inventory data.

Slowing economy

Despite the recent recovery of crude prices, reaching close to US$100 (3,690 baht) per barrel following the withdrawal of millions of barrels from the market by Saudi Arabia and Russia, prices have eased off due to concerns over a slowing economy and prolonged high-interest rates in the US and Europe.

An OPEC+ group of countries proposed on Wednesday that the oil cartel maintain its current output reduction strategy. Meanwhile, in Asia, stock markets in Tokyo and Seoul led sharp declines on Wednesday after resuming trade following a long holiday weekend. Chinese markets remained closed for a week-long holiday.

The weakening of the yen against the dollar, surpassing 150 yen (37.30 baht) for the first time this year, has unsettled Japanese stocks.

Top finance officials in Japan declined to comment yesterday on whether there has been any intervention in currency markets to support the yen, a move that was previously undertaken when the dollar surpassed 150 yen in October last year.

The yen’s decline is attributed to the Bank of Japan’s ultra-loose monetary policy aimed at spurring sustainable economic growth following years of deflation.

This contrasts with the series of interest rate hikes implemented over the past year in the US and Europe.

Figures down

As of 9pm London time, the key figures were as follows: New York’s Dow was up by 0.4%, closing at 33,129.55 points, while the S&P 500 was up by 0.8%, closing at 4,263.75. Nasdaq was up by 1.4%, closing at 13,236.01.

London’s FTSE 100 was down by 0.8%, closing at 7,412.45, while Frankfurt’s DAX was up by 0.1%, closing at 15,099.92. Paris’s CAC 40 was flat at 6,996.73, and EURO STOXX 50 was up by 0.1%, closing at 4,099.85.

Tokyo’s Nikkei 225 was down by 2.3%, closing at 30,526.88, while Hong Kong’s Hang Seng Index was down by 0.8%, closing at 17,195.84. Shanghai’s Composite remained closed for a holiday.

The euro was up against the dollar at US$1.0506 (55.58 baht), while the pound was up at US$1.2138 (44.79 baht). The euro was down against the pound at 86.54 pence (38.83 baht), while the dollar was up against the yen at 149.12 yen (37.06 baht).

Brent North Sea crude was down by 5.6% at US$85.81 (3,165.96 baht) per barrel, while West Texas Intermediate was down by 5.6% at US$84.22 (3,107.30 baht) per barrel.

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