Volatility in the stock markets is continuing, with both worries over economic growth rates in key markets and the continued fall in oil prices contributing to uncertainty. US markets have showed gains, while European ones have fallen.
The FTSE 100, one of the key indexes measuring the performance of the London Stock Exchange, closed at a loss of 0.7%. Some markets on the continent have suffered more heavily. The primary Frankfurt index closed with a fall of 1.7%, and the main Paris index showed a drop of 1.8% at close.
Major US indexes, on the other hand, have uniformly shown gains. This is partly thanks to a noticeable pickup in the price of US crude oil, which briefly dipped below the US$30 per barrel mark recently but has now increased to US$31.03. The three main US share indexes showed gains varying between 1.4% and 2%.
The falls in European markets came after major selling activity in a number of key Asian markets, which also showed falls. At close, the Nikkei index showed a fall of 2.7% for Japan’s stock market. At one point, Japanese shares had been down by fully 4%, but they managed to recover some of these before the close. Meanwhile, the Hang Seng – the main index of Hong Kong shares – toyed with the lowest levels seen for two and a half years, before easing off somewhat to be down 0.6% when the market closed.
One of the few positives amongst the main Asian markets was the Shanghai Composite. Shanghai’s shares have been through a few months of tough trading conditions now, but they have just managed to pick up by almost 2% when so many other markets have been falling.
One of the key factors behind the volatility in so many global markets is the international oil price, which has fallen drastically since mid-2014. In many countries, oil represents a major section of industry and a vital part of the national economy, and the drop in prices has hit such countries hard. Many Middle Eastern oil-producing nations have suffered, and Russia has recently announced that it may have to revisit its most recent Budget on account of the impact. It is not just countries that are heavily reliant on oil and related taxes that have suffered, as this group contains many countries, some major international economic forces, and as such the ripples have been very widespread. Low oil prices are predicted to continue for some time, and the impact on stocks and shares around the world could be just as lasting.