United States stocks rebound a day after plunge, led by energy sector

The late-day selloff came despite earlier gains sparked by better-than-expected trade data from China that reduced slowdown fears and an early bounce in oil prices from recent lows. Meanwhile, crude oil prices dropped well below $30 per barrel amid speculation Iranian oil will exacerbate the global supply glut.

European stocks opened higher but quickly erased their gains. In Australia, energy sector was hit index the most, followed by Information Technology sector.

Investors will hope Friday was the bottom of this most recent sell-off, which has managed to wipe out almost 1,437 points from the Dow in only about two weeks.

The collapse in oil prices has spooked financial markets and battered an array of assets from commodity currencies to mining stocks as investors fret about the health of the global economy. USA crude has fallen 17 percent in just seven sessions, a gift to consumers across the globe but also a strong force for disinflation. “Now we’re probably going to see the market go the other way”.

Market participants continued to keep an eye on China’s yuan. Dow futures fell 0.9 percent while S&P futures also dropped 0.9 percent. Australia’s S&P/ASX 200 fell 0.3 percent to 4,892.80. The gauge is headed for a third weekly decline, its longest slide since July. US equities markets are closed Monday for a federal holiday.

By now, stock markets across the globe have lost over $14 trln since June, and despite Wall Street performing better during the period, now it might be time the U.S. stocks officially entered bear market. CSI 300 index jumped by 2.08%, to add 66 points to the index.

“In order to maintain an efficient economy, you can’t be pushing your production up and down by half a million barrels a day to prop up prices somewhere else”, said Sadad al-Husseini, a former executive vice president of Saudi Aramco, the national oil company, who now runs a consulting firm.

All Stoxx 600 industry groups dropped, except miners and oil companies. Europe’s benchmark closed more than 20 percent from its record in April – meeting the common definition of a bear market. Brent fell 4.8 per cent to $29.54 a barrel.

“There’s an bad lot of uncertainty out there and oil prices continue to decline below that key $30 a barrel mark”, said Michael Hewson, chief market analyst at CMC Markets. Data from the US showed domestic oil inventories increasing even while there was global oversupply.

The European markets ended Friday’s session firmly in negative territory, extending its weakness from the previous trading day. Results were well below what economists were predicting and marked the lowest levels in about 7 years. The metal has been whipsawed this week, after rallying to a two-month high last Friday.

The euro moved little within its well-worn range, fetching $1.0855. The Nasdaq was off 2.7 percent.

For the week, the index lost 3.1 percent. The Hang Seng China Enterprises index of mainland stocks listed in Hong Kong fell 2.6 percent to a four- year low.

Asian stockmarkets have gone lower despite making gains in early trading, led by the Shanghai Composite index, down 3.6 per cent to 2,900.97.

The Shanghai Composite lost 3.4 percent, while the CSI300 tumbled 3.1 percent.

New passenger vehicle registrations rose 16.6 percent year-on-year to 1.11 million units. While exports slid 1.4% on year in dollar-denominated terms, imports declined 7.6%.

RWE decreased 4.58 percent and E.ON fell 4.57 percent.

US Treasuries gained as traders pulled back expectations for the number of Fed interest-rate increases this year.

All of that selling was tied to the bad news for energy companies. Junk-bond funds reported $US2.1 billion of redemptions in the week through January 13, according to data provider Lipper.