World stock markets lost ground yesterday, pressured by a sharp drop in oil prices to their lowest in more than a year, while the US dollar strengthened on hawkish comments from US Fed officials.
U.S. stocks rose on Monday, with the S&P 500 and the Dow hitting record highs with growth sectors such as technology in favour again as investors appeared to regain confidence in the economy after upbeat comments from Federal Reserve officials.
Nine of the S&P 500's 11 industry groups fell, as energy stocks (-1.3%) extended losses for the year's worst performing sector after WTI crude fell below $43/bbl before closing 2.1% lower at $43.53/bbl. France's CAC40 Index shed 0.3 percent, while Germany's DAX Index decreased 0.6 percent, and the UK's FTSE 100 Index fell 0.7 percent. Crude stockpiles dropped by 2.5 million barrels over the past week, according to the Energy Information Administration. Goldman Sachs was off 0.4 percent and Bank of America fell 1 percent, weighing on the Dow and the S&P.
CHINA'S ARRIVAL: Chinese shares traded in Shanghai, which have always been hard for foreign investors to trade, rose 0.5 percent after index provider MSCI said it will include 222 of what are called "Chinese A-shares" in its widely followed Emerging Markets index.
Suncor Energy fell 2.6 per cent to $37.97 and Canadian Natural Resources declined 1.9 per cent to $36.88.
Preliminary data showed volume was also mixed, lower on the Nasdaq and higher on the NYSE than at the end of trade on Tuesday.
OPENING UP: Red Hat, an open-source software company, surged to one of the biggest gains in the S&P 500 after reporting better-than-expected earnings for its latest quarter.More news: China aims to improve ties between Afghanistan, Pakistan
A big focus for Asia is whether index provider MSCI will later in the day open up its Emerging Markets Index to Chinese mainland shares which have restricted access for foreign investors.
The Dow Jones Industrial Average on Wednesday was down 57.11 points, or 0.27 per cent, to 21,410.03. Stocks in Taiwan turned up, but in Singapore and Southeast Asian markets, they were mostly lower.
Healthcare .SPXHX led the three gainers, with a rise of 0.65 percent. The two-year yield dropped to 1.34 percent from 1.36 percent, and the 30-year yield fell to 2.73 percent from 2.79 percent.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.16 per cent.
The British pound fell to $1.2629 from $1.2729 after the Bank of England cooled market expectations that it may soon raise interest rates.
COMMODITIES: Gold rose $2.30 to settle at $1,245.80 per ounce, silver slipped 4 cents to $16.37 per ounce and copper added 5 cents to $2.60 per pound.
Oil prices declined over 2 per cent on Wednesday on rising concerns about global oversupply.