US markets closed firmly lower on Tuesday as weakness in tech stocks and a historic collapse in oil prices weighed on the indices. The Dow Jones Industrial Average dropped 631.56 points, or 2.7 percent, to 23,018, with the S&P 500 index falling 86.60 points, or 3.1 percent, to 2,736.56. The Nasdaq Composite Index plunged 297.50 points, or 3.5 percent, to close the session at 8,263.23.
European markets also moved lower as traders reacted to the historic moment where oil prices traded negatively – when light sweet crude for May delivery contracts lost $55.90 per barrel to -$37.63. The pan-European Stoxx 600 index lost 1.5% with the German DAX, French CAC 40 and U.K. FTSE 100 also falling.
Maltese markets meanwhile gained, with the MSE Equity Total Return Index closing up 1.327 percent at 8,142.562 points. MaltaPost Plc led the gains with shares up 33.33 percent at €1.20, followed by Midi Plc which gained 6.84 percent to €0.406. Medserv Plc meanwhile led the losses with shares down 11 percent at €0.89.
Historic day as oil goes negative
Oil prices continued their slump on Tuesday, with Brent crude contracts falling to the lowest since 1999, as the market struggled with a massive crude glut amid a collapse in demand for everything from gasoline to jet fuel caused by the coronavirus outbreak. The fall follows two of the wildest days in the history of oil trading, as worldwide supply looks set to overwhelm demand for months to come and current production cuts fall far short of offsetting the over-supply.
May deliveries for West Texas Intermediate, the front-month U.S. contract, fell into negative territory for the first time in history on Monday and set a record for the number of contracts traded on Tuesday as traders rushed to close their positions before receiving 1,000 barrels of crude on their doorsteps.
The viral outbreak has caused fuel demand to drop by roughly 30% worldwide and energy companies in the United States, the world’s biggest producer, are scrambling to find storage for excess oil.
This article was issued by Peter Petrov, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.