Oil prices slid yesterday to their lowest in almost six years, depressing energy shares but cheering those investors who focused on stocks seen as likely to benefit from cheaper fuel costs.
The dollar hit its weakest in a month against the safe-haven yen.
Copper, whose price is linked to global growth prospects, fell to its lowest since 2009 as risk appetite waned.
Brent crude fell as low as $45.23 a barrel, down more than 4% on the day and extending Monday’s 5.3% fall in the benchmark oil price.
The rout – oil prices have fallen 60% since June – continued despite data showing Chinese imports of crude surged to a record 7.15-million barrels a day last month.
The fall hit shares in the oil-producing Gulf and in Japan after the energy sector helped push US stocks lower on Monday.
“Investors are bracing for some serious damage in the energy sector’s fourth-quarter earnings, and with oil dropping further this month, the outlook for revenue and profit looks grim,” Saxo Bank trader Andrea Tueni said.
“Even though in the long term it’s good news for a lot of sectors and the economy overall, the speed at which oil is going down is spooking the market.”
In a sign that oil’s slide, which economists fear could lead to a deflationary spiral, is not all bad news, metals company Alcoa reported late on Monday a higher than expected fourth-quarter profit, partly due to lower energy costs.
European shares opened lower, with energy shares, such as Total falling, but trading was choppy. The pan-European FTSEurofirst 300 index was last up 0.1%.
MSCI’s main index of Asia-Pacific shares, excluding Japan was up 0.3%, though Tokyo’s Nikkei 225 index closed down 0.6%. Tokyo’s fall reflected concern about the slide in oil prices.