Stocks, Oil Close Lower as Volatility Returns

• Stocks, Oil Close Lower as Volatility Returns

Market volatility ruled global financial markets on Tuesday as stocks and crude oil closed lower.

The S&P 500 Index declined by 0.2 percent after rising as much as 3.5 percent, while the Stoxx Europe 600 Index advanced after a report showed the rate of new infections slowed in Italy and France, the centre of Euro-area outbreak.

“We’re going to continue to be very volatile, and you’re going to see this roller coaster continue,” said Chris Gaffney, president of world markets at TIAA. “We will see a test of the bottoms again.”

Crude oil closed lower as market doubt Saudi Arabia and Russia cuts would be enough to contain the impact of COVID-19 on the commodity market, especially with the weak global demand.

Brent crude oil, against which Nigerian oil is priced, declined from about $33 a barrel it traded on Monday to $32.42 per barrel on Tuesday amid rising global uncertainty.

“With the volatility being so wild lately, it doesn’t take much for the buyers to pull-in their horns,” said Matt Maley, equity strategist at Miller Tabak & Co. “When oil rolled over, stock buyers got a little nervous.”

The US dollar declined by 1.1 percent to 1,255.75 on Bloomberg Dollar Spot Index, the largest drop in more than a week.

However, the safe-haven currency, Japanese Yen gained 0.2 percent against the weak US dollar to 108.76, while the euro single currency gained 1.1 percent to $1.0897. The British Pound inched higher by 1 percent to $1.2344.

The uncertainty surrounding the spread of coronavirus in the US continues to weigh on the US dollar and the entire economy as investors remain wary of the world’s largest economy.

In Asia, the MSCI Asia Pacific Index expanded by more than 2 percent after gaining almost 3 percent on Monday. Yuan and Chinese stocks gained ahead of targeted stimulus by policy markers.