Stock markets turn lower as oil price keeps rising

AP News
Posted: Dec 01, 2016 7:24 AM
Stock markets turn lower as oil price keeps rising

SEOUL, South Korea (AP) — Stocks turned lower in Europe on Thursday while the price of oil continued to rise, boosted by OPEC's decision to cut output as well as data showing Chinese manufacturing is growing.

KEEPING SCORE: Britain's FTSE 100 was down 1.1 percent at 6,710 while France' CAC 40 shed 0.6 percent to 4,551. Germany's DAX fell 0.8 percent to 10,560. European economies are net importers of oil, so the big increases in energy prices this week could weigh on the region somewhat.

Futures augured a lackluster start on Wall Street. Dow futures remained nearly unchanged while S&P futures slipped 0.1 percent.

OIL: Oil prices continued to rise after surging Wednesday thanks to the output cut agreement among OPEC nations, which collectively produce more than one-third of the world's oil. They agreed to trim production by 1.2 million barrels a day starting in January. The price of U.S. crude was up another 45 cents to $49.89 a barrel in New York. The contract surged $4.21 on Wednesday, the biggest one-day gain since February. Brent crude, the international benchmark, rose 76 cents to $52.60 a barrel in London.

CHINA DATA: The monthly purchasing managers' index by the Chinese Federation of Logistics and Purchasing showed that Chinese factory activity rose to 51.7 points in November, its highest in more than two years. The index, a widely watched indicator of China's outsize manufacturing sector, is based on a 100-point scale, with numbers below 50 indicating contraction.

ANALYST'S TAKE: "China's official PMI manufacturing surprised on the upside," said Jingyi Pan, a market strategist at IG in Singapore. "This is the highest level seen since July 2014 and could add to the wave of optimism in the markets today."

ASIA'S DAY: Japan's Nikkei 225 jumped 1.1 percent to 18,513.12 while South Korea's Kospi closed flat at 1,983.75. China's Shanghai Composite Index added 0.7 percent to 3,273.31 and Hong Kong's Hang Seng index gained 0.4 percent to 22,878.23.

CURRENCIES: The dollar was under pressure, as it often is when oil prices rise significantly. It dropped to 114.36 yen from 114.44 yen. The euro rose to $1.0631 from $1.0595.