European markets are expected to open lower on Monday, following mixed trade in Asia and a drop in oil prices that continues to hit investor sentiment in global markets.
London’s FTSE 100 is seen off 31 points at 6,159; France’s CAC 40 is expected to open 24 points lower at 4,438, while Germany’s DAX is called 34 should come in down at 9,917.
China’s Shanghai Composite and Shenzhen Composite, however, moved upwards after state-backed China Securities Finance Corp said it would begin again to offer margin financing to securities firms after a previous suspension. Analysts see this is an indication that Chinese regulators are ready to give the market easier and cheaper funding.
Crude Slides
Crude oil slid for a second session on Monday, falling from last week’s 2016 highs on concerns over a supply glut after the U.S rig count rose for the first time since December. U.S. crude CLc1 dropped 67 cents, or 1.7 percent, to $38.77 a barrel by 0617 GMT. Brent crude’s front-month contract LCOc1 was down 33 cents at $40.87. It hit a high of $42.54 a barrel in the last session.
The market on Friday climbed to $41.20 a barrel, its highest since early December, before losing ground to settle down nearly 2 percent at $39.44.
According to a spokesman at ANZ, “The rebound in crude oil prices in the last month appears to have stabilized the number of rigs at work in the U.S. shale sector.”
The slight increase in oil prices is the result of a combination of declining oil output, smaller crude stockpile builds and surging gasoline consumption in the United States. Talk by the Organization of the Petroleum Exporting Countries (OPEC) to freeze production at January levels has contributed to the rally over the last two months.
