Global commodities storm sinks stocks again

[NEW YORK] World stocks endured another plummet Wednesday as worries about retreating commodity prices and volatile currencies pushed equities lower.

Mining companies remained in focus one day after global giant Anglo American stunned markets with news it would cut 85,000 jobs. Some miners, such as London-kisted Rio Tinto and Freeport McMoRan of the US, rallied, but analysts described sentiment as still unsettled by Anglo's grim outlook.

Oil prices also continued to weaken, as the leading US and European benchmarks closed at multi-year lows for the third straight day following last week's Opec meeting, which took no action despite plunging prices.

Analysts also cited a surge in the euro, which was up to US$1.1026 from US$1.0619 last Wednesday, a day before a European Central Bank stimulus package disappointed markets.

"The currency markets and the oil markets have been driving the positioning in equity markets and that's been mostly selling," said Michael James, managing director of equity trading at Wedbush Securities.

US stocks finished firmly lower after a volatile session, with the tech-rich Nasdaq falling 1.5 per cent and the broad-based S&P 500 losing 0.8 per cent.

The stronger euro weighed on Frankfurt, which fell 0.8 per cent, and Paris, where the CAC 40 lost 1.0 per cent.

Analysts also saw the rising yen as a factor in a 1.0 per cent fall in the Nikkei in Japan.

Shanghai eked out a minor gain after a slightly better-than-forecast inflation reading for November.

News of yet another giant industrial merger in the works provided the action in US markets. DuPont and Dow Chemical both jumped 11.9 per cent on prospects of their combining into the world's biggest chemical company, with annual sales totalling more than $90 billion. The deal, if finalised, could make 2015 a record year for total transactions.

Yahoo ended 1.3 per cent lower after announcing a retreat from plans to hive off its Alibaba stake and instead seek a "reverse spinoff" of its core Internet properties. Chairman Maynard Webb firmly endorsed Marissa Mayer to stay on as chief executive.

Embattled German auto giant Volkswagen jumped 6.3 per cent after concluding its emissions-cheating scandal was not as bad as feared, at least with respect to carbon dioxide emissions from some cars. The company said further testing showed that Volkswagen had not misrepresented emissions counts in these instances.

However, Volkswagen continues to face myriad questions over the pollution-cheating software installed in 11 million diesel cars worldwide.

REUTERS