Global growth concerns punish stock markets

Global Markets

Global stocks were left under immense pressure during trading on Thursday as the catalytic combination of risk aversion and oil price volatility triggered an aggressive selloff across the board. European equities, which were already depressed, headed for one year lows following the growing anxieties from investors who frantically scattered away from riskier assets amid the heightened fears over the dimming global outlook. Stocks in Europe sunk lower with the CAC40 concluding -1.80% as news about car maker Renault potentially facing its own WV emission scandal encouraged sellers to send its stock price plunging over 12%. This weakness managed to seep into the American equity arena with U.S stocks meandering near three-month lows before a rally in the shares of energy companies managed to pull the S&P 500 back into the green. These erratic movements in the stock markets complimented with the global unease may have left most traders wary, and as such this may be reflected in the Asian equities arena which has slowly sunk back into red territory as of writing.

FTSE100 dips below 5800

The elevated concerns over the deceleration in China combined with the steep declines in the oil markets has left the FTSE100 open to further losses. This Index is heavily bearish on the daily timeframe and may start to fall further as more traders depart from riskier assets. Prices are trading below the daily 20 SMA while the MACD has crossed to the downside. A daily close below 5800 may encourage a further selloff towards 5650.

WTI Oil battles with $30 support

WTI Oil bulls arecurrently engaged in a losing battle above the psychological $30 support as growing speculations around the sanctions on Iran being lifted by Monday which would open a path for increased oil exports weigh heavily on investor sentiment. Prices were already under pressure from the recent sharp rise in gasoline stockpiles while overall concerns about global growth have haunted investor attraction towards oil consequently limiting how high prices could appreciate. This commodity remains fundamentally bearish as concerns around the unrelenting oversupply in the markets are still at record levels, and with no signs of an emergency OPEC meeting forthcoming, the catalyst for a further decline below $30 may be the additional supply Iran provides when sanctions are lifted.

From a technical standpoint, WTI oil heavily bearish as there has been consistently lower lows and lower highs. The candle currently trade below both the 20 and 200 Simple moving averages while the MACD has also crossed to the downside. A breakdown below $30 should encourage a further decline towards $29 and potentially lower.

Commodity spotlight – Gold

Gold bears received encouragement on Thursday with prices crashing to fresh daily lows of $1071 following the US Federal Reserve’s president’s hawkish comments around the possibility of further US rate hikes in the future. The effects of December’s positive NFP report which reinforced the expectations that US rates could be increased once more before the end of this quarter had already played a part in restricting how high prices could appreciate. The new developments regarding the Fed hawks have left Gold prices heavily depressed below $1110 and if US retail sales exceed expectations today, sellers may be encouraged to attack this zero yielding metal back down towards $1060.

From a technical standpoint prices are on the verge of trading lower once a daily close below $1075 is achieved. Prices are in the process of trading back below the daily 20 SMA while the MACD looks to have lost momentum. A breakdown and daily close below $1075 should encourage a further decline towards $1060.