Global equity markets continue to trade in negative territory during the last trading sessions of the year, as the gloomy macroeconomic picture weighs on market sentiment. In addition, the ongoing political uncertainty in Greece dominates the European markets, adding further pressure to the euro which currently trades around 1.21 against the US dollar. Trading volumes remain fairly thin due to the New Year’s holiday break.
The CAC, DAX, IBEX and London equity benchmark index retreated sharply in today’s session after plunging between 1.05% and 1.5%, while in the US the Dow Jones and S&P 500 indices declined 0.28% and 0.33%, respectively at the time of writing.
Crude oil prices remained under pressure with Brent front month futures falling below $58 per barrel. Energy stocks were sharply lower in London. BG Group plunged over 2.6% as the company filed commerciality declarations for oil and gas accumulations in Brazil, near the Iara region. Royal Dutch Shell, BP and Tullow Oil extended declines between 1.7% and 2.4%.
Banks and financial stocks were down as risk appetite was limited. HSBC dropped nearly 2% and set a bearish tone across the UK banking sector as RBS, Standard Chartered, Lloyds and Barclays followed the downtrend and retreated between 0.45% and 1.05%.
We continue to see fairly disappointing macroeconomic indicators from the US, Asia and Eurozone. In addition, the political uncertainty in Greece has limited any potential for a rebound in the European equity markets due to renewed concerns regarding Eurozone’s economic prospects.
Tomorrow, investors will be keeping an eye on the US weekly jobless claims as well as Chicago PMI data and pending home sales figures in November. However, we expect trading conditions to remain fairly muted due to the post-Christmas holiday break.