Oil a thorn in the side of global indices once again, as Tesco hampers the FTSE

After a serious case of the Monday blues, the markets didn’t begin Tuesday any better, as plunging Brent Crude oil reared its ugly head yet again.

Brent crude hit a five year low as it dipped below the $66 per barrel mark, reaching a low of $65.30 this morning. With no sign of worldwide production slowing down in earnest, the plummeting oil prices are permanently lingering threat at the periphery of the global indices.

Weak oil saw the Nikkei dropping another 140 points after it had fallen by a similar amount yesterday, as it opened at 17802.5 and closed at 17659.5. The Japanese index is quickly losing the ground it gained last week, as the country gears up for an election on Sunday. The Nikkei will be looking to Japan’s BSI manufacturing index figures tonight to provide a boost in the face the world’s economic woes.

The bearish sentiment surrounding the Nikkei had a positive effect on the yen, which managed to finally repel the dollar somewhat to shrink from 121 to 119 this morning. This bad news for the US was joined by the Dow Jones slipping from 17957.5 to 17866.5; despite being so close to the 18000 mark, the global downturn yesterday hampered the index’s chances of breaching that mark. Later today sees the JOLTS job openings in the US; whilst not has important as non-farm or unemployment change, this figure could be the good news the US markets need to send them to new highs.

Despite a trade balance up 2 billion to 20.6 billion euros, the DAX opened 40 points lower today at 9940.8. This comes as Greece received a bailout extension, further highlighting the shaky state of the Eurozone economy, and the ever-increasing need for some kind of ECB aid. With Nowotny’s comments yesterday providing a dark cloud with no silver lining, the Eurozone will be hoping that its consistently disappointing data provokes Draghi and co to take action sooner than planned.

Finally the FTSE added home-grown woes to the worldwide malaise, as manufacturing and industrial production came in much lower than expected. The former was a shocking -0.7%, whilst the latter was a dismal -0.1%. This followed an already torrid morning, with the FTSE opening 30 points lower at 6631.8, as the oil-inspired decline of multiple energy companies, including Premier Oil and Enquest, was joined by a steep fall by Tesco. 

The struggling supermarket giant issued its fifth profit warning of 2014 this morning, as its continued sales collapse, exacerbated by the rise and rise of bargain chains Aldi and Lidl, coincided with an investigation into accounting irregularities and multiple executive sackings that severely damaged consumer confidence in the store. Shares in the company fell 10% following this morning’s news, and signals an un-merry Christmas and a shaky New Year for the aging King of the supermarkets.