NEW YORK — Crude oil resumed its recent decline, but equity markets were stronger on Thursday, with Europe rebounding from losses on fears of Great Britain exiting the European Union.
Wall Street was little changed after Wednesday’s late-day gains that marked a reversal from earlier losses. Chinese stocks dropped 6%, feeding concerns about the strength of the world’s second-largest economy.
The Dow Jones industrial average rose 4.94 points, or 0.03%, to 16,489.93, the S&P 500 gained 0.17 points, or 0.01%, to 1,929.97 and the Nasdaq Composite dropped 6.07 points, or 0.13%, to 4,536.53.
The SSE Composite Index fell 6.4%, the biggest day of losses in a month. The slump in Shanghai, where markets have lost more than half their value since June, underscored a sense of caution over China ahead of Friday’s G20 meeting there.
Pressure is on the G20 leaders to get the global economy back on track and to calm markets after one of the rockiest starts to a year on record.
The IMF called on Wednesday for those countries that still have money available to help boost growth and Chinese officials, speaking as G20 delegates started to arrive, moved to ease fears about another sharp drop in the yuan.
"We do recognise the risk the global economy faces," China’s Deputy Finance Minister Zhu Guangyao said at a conference. "We also understand how important it is to correctly communicate with the market." The US Energy Department said Wednesday that crude stockpiles grew to more than 507 million barrels, an all-time high. US crude fell 3% to $31.14. Brent crude dropped more 3% to $33.40.
"At the moment the markets just feel like a chicken with its head cut off," said Saxo Bank’s head of FX strategy, John Hardy.
"Everything is swinging around on the daily moves on oil.
There was a pretty remarkable comeback by Wall Street yesterday despite some weak data so it feels like it’s a bit dodgy till we get past the G20 meeting." Europe’s FTSEurofirst 300, which had lost almost 4% since Tuesday, was up 1.8% as risk appetite returned.
Britain’s sterling was slightly higher at $1.3941, taking a breath from a 5% fall since early this month on fears that a public vote on June 23 could see Britain become the first country to quit the 28-member European Union.
Dealers said there were also signs of downward pressure building on the euro ahead of next month’s European Central Bank meeting which is expected to see the bank cut rates again. Eurozone long-term inflation expectations fell to record lows on Thursday.
The dollar struggled to make much headway, however, due to doubts over whether the Fed will raise rates at all this year.
The euro edged up 0.2% to $1.1030.
Gold, meanwhile erased early losses and rose about 0.8% to $1,239 an ounce, within sight of a one-year high of $1,260.60 reached on February 11.