Dec 16, 2014 5:53 AM
Ruble slides to new low, Wall St. poised for gains
The Associated Press
HONG KONG (AP) The ruble extended its slide to a new record low Tuesday as the slump in oil prices rattled Russia's economy. Asian stocks slid after Chinese manufacturing contracted this month but European markets inched higher and Wall Street was poised to rebound.
KEEPING SCORE: European stocks overcame early losses to trade higher. France's CAC 40 was up 0.1 percent to 4,011.16 and Germany's DAX added 0.5 percent to 9,374.25. Britain's FTSE 100 gained 0.6 percent to 6,173.00. U.S. stocks were set to rebound from Monday's losses. Dow futures were up 0.4 percent at 17,188 and S&P 500 futures rose 0.4 percent to 1,991.10.
CURRENCIES: The ruble was shaky and the Russian stock benchmark was down 6.5 percent despite the Russian central bank's dramatic interest rate hike to stem the currency's decline. The Russian currency weakened to a new low of 66 to the dollar after sinking 13 percent on Monday. The ruble has lost about half its value since the start of the year because of the collapse of oil prices and Western sanctions over Russia's actions in Ukraine. In other currency trading, the dollar weakened to 116.68 yen from 117.82 in late trading Thursday. The euro strengthened to $1.2498 from $1.2443.
THE QUOTE: "An accelerated fall in oil prices, coupled with the U.S. Congress passing a bill that authorizes new sanctions on Russia, triggered a stampede out of Russian assets," said Mizuho Bank in a commentary. "While President Obama has not yet decided whether to sign the bill into law, markets were sufficiently spooked."
ENERGY: Oil prices are at five-year lows as supply booms while energy demand wanes. Benchmark U.S. crude was down $1.38 to $54.53 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.90, or 3.3 percent, to close at $55.91 on Monday. Brent crude, a benchmark for international oils used by many U.S. refineries, fell $1.96 to $59.25 in London.
CHINA FACTORIES: Shanghai shares gained after a preliminary HSBC report on manufacturing showed a contraction for the first time in seven months. While the numbers underscored the persistent weakness in the world's second biggest economy, they also fuelled mainland Chinese investor hopes of more stimulus after a surprise interest rate cut last month. The report, however, was a negative for other Asian markets.
ASIAN SCORECARD: Japan's benchmark Nikkei 225 index tumbled 2 percent to close at 16,755.32 and South Korea's Kospi lost 0.9 percent to 1,904.13. Hong Kong's Hang Seng fell 1.6 percent to 22,670.50. In mainland China, the Shanghai Composite Index surged 2.3 percent to 3,021.52. Australia's S&P/ASX 200 shed 0.7 percent to 5,152.30.
AIRLINE TROUBLE: Indian budget carrier SpiceJet plunged 17 percent on the Bombay Stock Exchange. The cash-strapped no-frills airline is struggling amid tough business conditions. Investor doubts that it will be able to survive are snowballing even after the state-run Airports Authority of India indicated it wouldn't press for immediate repayment of debts, according to a report by the Press Trust of India.