Oil retreated near the lowest level since 2009 and European equities pared an annual gain as trading wound down at the end of a year dominated by rising U.S. interest rates, slumping raw materials prices and Chinese stock-market volatility.
The Standard & Poor’s 500 Index turned negative for the year. European stocks fell 0.4 percent, heading for the worst December since 2002, while emerging-market equities pared the worst annual drop since 2011. Brent lost as much as 0.9 percent, putting it on course for the biggest two-year drop since at least 1988. The yen headed for a record fourth annual loss.
“It has not been a good end to 2015, with low liquidity making market weakness even more pronounced,” said Ramiro Loureiro, an analyst at Banco Comercial Portugues SA’s Millennium unit in Lisbon.
“Even though we had all types of risks and concerns thrown at markets, such as the collapse in oil prices and key central bank decisions, Europe still managed to end the year higher.”
Global equities were Stocks fall with commodity currencies as oil ends ‘15 below $37poised for their first decline in four years as a slowdown in the Chinese economy fueled the biggest retreat in raw materials prices since 2008 just as the Federal Reserve ended its zero interest-rate policy. The Bloomberg Commodity Index is down 25 percent in 2015. The Standard & Poor’s 500 Index is little changed in its worst year since 2011, while emerging-market equities have plunged 17 percent. Bonds gained for a second year, outperforming stocks globally, on haven demand.
Stocks
The S&P 500 fell 0.5 percent at 9:33 a.m. in New York. Markets are closed tomorrow for the New Year holiday. Trading volume has been thin all week, and the number of shares changing hands on U.S. exchanges yesterday was the lowest for a full session this year.
The S&P 500 has struggled to hold its gain this year as energy companies have plunged 10 percent this month to cap their worst year since 2008. The broad measure has risen as much as 3.5 percent in 2015, and fallen 9.3 percent at its low in August.
The market’s torpor is likely to be broken next week as investors will return from the holiday to a swath of data, including gauges on the manufacturing and services industries, the monthly jobs report and minutes from the Fed meeting that ended with the first rate increase since 2006.
The Stoxx Europe 600 Index declined for a second day, with the volume of shares changing hands about 60 percent lower than the 30-day average. Markets including Germany, Switzerland and Italy were closed, while the U.K., France and the Netherlands were due to shut early. It’s a normal trading day on the New York Stock Exchange, which closes at 4 p.m.
Even as the Stoxx 600 headed for a third weekly advance, it has fallen 4.9 percent in December, reducing its gain this year to 7.1 percent.
Germany’s DAX Index climbed 9.6 percent in 2015, with strategists seeing more gains for 2016. Italy’s FTSE MIB Index was among the best performers in western Europe, rallying 13 percent. The U.K.’s FTSE 100 Index fell 4.9 percent. Greece’s ASE Index plunged 24 percent.
Oil fell Wednesday after industry data showed an unexpected increase in U.S. crude inventories last week, adding to the glut that pushed prices below $40 a barrel. Supplies at the nation’s largest storage hub in Cushing, Oklahoma, rose to a record.
U.S. natural gas futures jumped 56.8 percent to $2.364 per million British thermal units, rebounding after the first drop in five days Wednesday on milder weather forecasts for January.
Gold was poised for its third straight annual loss, the longest retreat in 15 years, as the surge in the dollar following the Fed’s monetary-policy tightening compounded the broader collapse in commodity prices. Bullion for immediate delivery traded for $1,059.24 an ounce, little changed on the day and down 11 percent this year.
Metals in London were heading for the first monthly gain since April amid speculation demand conditions in China may stabilize into next year as some producers start to scale back output. Nickel added 0.6 percent to $8,715 a metric ton, while copper fell 1.1 percent to $4,681. The LME Index remained 24 percent lower for the year.
