European stocks fell for the seventh straight session as falling oil prices and concerns about global economic slowdown undermined investor confidence. The euro strengthened against the dollar trading at $1.1289 late Tuesday after hitting highest level since October 22 earlier in the session. The Stoxx Europe 600 index ended 1.6% lower. Germany’s DAX 30 ended lower at 8879.40, losing 1.1% after a 3.3% drop pushed it into a bear territory on Monday. France’s CAC 40 was down 1.7%. The slide in bank stocks continued as investors revised downward the outlook for the sector in light of expected slowdown in global economic growth. Deutsche Bank shares lost 4.3%, UBS Group tumbled 5.6% and Credit Suisse Group sank 8.4%. Data released in Germany showing unexpected fall in industrial production in December didn’t help improve market sentiment either. Today at 10:30 CET December Manufacturing and Industrial Production will be released in UK. The tentative outlook is positive. At 16:00 CET the GDP growth in the three months ending in January will be published by the National Institute of Economic and Social Research in UK.
Nikkei fell 2.3% today as investors sold off equities on worsened global economic outlook and yen continued strengthening against the dollar after hitting 15-month high overnight. As investors sought the safety of government bonds 10-year yield for Japanese government bond turned negative for the first time on Tuesday before recovering to 0.01%. Bank stocks suffered further losses, with recent outperformers such as food companies and drug makers falling 3.6% and 3.8% respectively in a broad selloff.
Oil futures prices are moving higher today after falling for the fourth session in a row on Tuesday. March WTI fell 5.9% to $27.94 a barrel on Nymex, April Brent crude sank 7.8% to $30.32 a barrel on London’s ICE Futures exchange as US Energy Information Administration cut its 2016 forecasts for crude prices. While EIA forecasts US shale oil output will fall by 92,000 barrels a day in March from February, the agency estimates global crude supply will exceed demand growth throughout the year. Today at 16:30 CET US Crude Oil Inventories will be released by the Energy Information Administration. US crude stocks are expected to rise with a report of an industry group American Petroleum Institute indicating a build of 2.4 million barrels for last week.
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