European markets drowning in cheap oil

Wednesday, 20. January 2016 18:22

Markets across Europe have closed sharply lower, with the energy sector pulling markets for the entire session.

German DAX index lost 2.82%, with energy company E.ON losing as much as 5.20%, while the electricity giant RWE took even heavier blow with 6.32% losses. On the brighter side, sports equipment maker Adidas enjoyed yet another day of gains, ending 0.09% higher.

The City of Lights saw all red boards as CAC 40 plunged 3.45%. Oil company Total crashed 5.44%, and the French banks became latest victims in the financial sector: Credit Agricole shares were down 4.80%, and Société Générale’s fell 4.41%. Even the day’s winners such as Air Liquide, Veolia and Sanofi lost between 1.50 and 2.50%.

Italian markets were beaten even harder, as Milan’s MIB index tumbled 4.83%. Banks pulled the market down, with Banco Popolare’s huge loss of 10.88%, while Unicredit saw huge sell-off and shares lost 7.77% of value, and it was similar with Intesa Sanpaolo with fall of 5.50%.

In London, FTSE 100 dug in 3.46% lower. Anglo American PLC lost a whopping 7.43%, and was followed by Royal Dutch Shell A’s losses of 7.25%. There were green dots on the board, with Randgold Resources plus of 3.47% and another day of gains of 0.08% for Sports Direct International.

In Switzerland, where the World Economic Forum started on Wednesday, Zürich’s SMI sank 3.13%. It is finances that especially hurt: UBS Group shares were 3.99% lower, and the insurance giant Swiss RE lost yet more - 4.41%.

Oil prices continued to fall after European market close, with the international benchmark Brent price crashing 4.98% at $27.30 a barrel, and the U.S. sweet crude WTI spilled as much as 5.77% to $27.74 a barrel, both at 6:11 p.m. CET.

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Author:
Breaking the News / ZR