Saturday 13 February 2016

Japanese stocks hammered again but oil rebounds strongly

Financial markets opened on Friday with another hammering for Japanese stocks. The Nikkei 225 ended the day down 4.8 percent to finish the week with an 11 percent drop, its biggest weekly percentage drop since October 2008.

The rout in global markets ended when oil rebounded. West Texas Intermediate surged 12 percent on Friday.

US and European stocks duly rose. The S&P 500 jumped 2.0 percent, its biggest gain in two weeks, to end a five-day slide.

However, while the bounce in oil on Friday brought some respite for markets, it may not last. From WSJ's MoneyBeat:

Oil’s sharp rise of 12% so far today — the biggest one-day run in 7 years — isn’t a sign it is going back to $100 a barrel any time soon, or even $40. Nothing has really changed among the slate of factors that caused it to dive more than 70% since June 2014.

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