Oil falls by more than 3% on concerns of oversupply

Major US indexes ended mixed as investors balance unease about the spread of a more contagious coronavirus variant against another round of encouraging company earning. The Dow dropped 0.28%, the S&P 500 followed with a fall by 0.18%. The Nasdaq however rises by 0.06%. The 10-year US treasury yields ended 5 bps down on the day, yielding around 1.1773 amid the COVID-19 delta variant concerns. US Brent Crude oil fell more than 3% on Monday, ending the day at 72.89, after weak economic data from China and United States, and higher crude output from OPEC producers stoked fears on weakness in oil demand and oversupply.

Asian markets opened all red today. China’s CSI 300 is down by 0.03%, Japan’s NIKKEI also fell by 0.50% trading at 27641.83. HANG is currently trading 0.31% down as investors evaluate their holdings in the wake of Beijing’s broad crackdown on Chinese internet giants. Eyes will be on the Australia’s Central bank meeting today, which expects the cash rate at 0.1%, Australia’s ASX is down by 0.23%.

UK equities were higher at the close on Monday, as gains in the Aerospace & Defense, Industrial Metals & Mining and Financial Services sectors propelled shares higher. At 06:00 GMT, the DAX in Germany traded 0.16% higher, CAC 40 in France climbed 0.95%, while the FTSE 100 in the UK also rose by 0.70%. On Tuesday were some strong results in the banking sector helping sentiment in the European equity markets.  French bank Société Générale, the country’s third-largest lender, raised its forecast for the full year after it swung back to a profit in the second quarter, helped by a rebound in its French retail banking business.  Additionally, Standard Chartered posted a better-than-expected 57% jump in its first-half pretax profit while also announcing a $250 million share buyback and resumed interim dividend payments, as it benefited from an economic recovery from the coronavirus pandemic.

The stock market of the Russian Federation, having tested 3800 points on the Moscow Exchange index on the rise on Monday morning following the external stock exchanges, backed off in the afternoon due to falling oil prices on fears of the spread of coronavirus. By the evening, the stock market won back the improvement in the external stock market situation and fell into a consolidating sideways trend in anticipation of fresh statistics from the United States. Attempts for further growth are constrained by sagging oil amid fears over the spread of the coronavirus. The Moscow Exchange index increased by 0.44% and amounted to 3788.10 points. The RTS increased by 0.62% – to 1635.90 points.

Oil prices edged lower as concerns over slowing economic activity in both the US and China, the two biggest consumers of crude in the world, coupled with mounting COVID worries which weighed on sentiment.  US crude futures traded 0.1% lower at $71.22 a barrel, while the Brent contract fell 0.1% to $72.83. They also flagged slowing manufacturing activity as a key concern, to both China and the United States. Gold futures fell 0.5% to $1,813.80/oz, while EUR/USD traded 0.1% higher at 1.18752037.